PepsiCo Inc (NASDAQ:PEP) aims to silence analysts who are lowering the stock's price target and an activist investor pushing for changes when it releases third-quarter financial results Thursday before the market close.
Here are the earnings estimates, what experts are saying about the beverage giant, and the key items to watch.
Earnings Estimates: Analysts expect PepsiCo to report third-quarter revenue of $23.83 billion. Benzinga Pro data shows $23.32 billion in last year's third quarter.
The company has beaten analyst estimates for revenue in three consecutive quarters. It also exceeded analyst estimates in seven of the last 10 quarters overall.
Analysts expect PepsiCo to report third-quarter earnings per share of $2.26, down from $2.31 in last year's third quarter. The company beat analyst estimates in the second quarter and has beaten estimates in nine of the last 10 quarters overall.
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What PepsiCo Experts Say
"PepsiCo shares remain under pressure," Freedom Capital Markets Chief Market Strategist Jay Woods said in his newsletter.
PepsiCo stock has underperformed Coca-Cola (NYSE:KO) year-to-date. That's among the reasons why Woods said Pepsi needs to "deliver more than just a decent quarter,” he adds.
The market expert said Pepsi faces pressure that includes Robert F. Kennedy Jr.'s attack on processed foods, pressure on margins, weaker innovation relative to peers and a tough environment for consumer goods.
"It would help to see a surprise on margins, slow innovation momentum and, most importantly, offer confident guidance. Pepsi needs to reenergize investor confidence as price action has been flat for the last three years."
Woods said the $145/$146 level is what to watch heading into earnings. The market expert said a short-term rally could take shares to $156.
"Long-term we may be in the midst of a turnaround as well. This should take longer to play out – give it another quarter, maybe two – but could bode well for the longer-term investor."
Bank of America Securities analyst Peter T. Galbo says PepsiCo remains a "defensive" play due to its strength in the beverages and snacks sectors.
Galbo maintained a Neutral rating on PepsiCo with a $150 price target.
The analyst said PepsiCo is likely to deliver steady returns to investors, balancing growth with dividends and share buybacks.
Here are other recent analyst ratings on PepsiCo and their price targets:
- JPMorgan: Maintained Neutral rating, lowered price target from $157 to $151
- Barclays: Maintained Equal-Weight rating, lowered price target from $144 to $140
- Citigroup: Maintained Buy rating, lowered price target from $168 to $165
- Wells Fargo: Maintained Equal-Weight rating, lowered price target from $154 to $150
Key Items to Watch
Pepsi's report comes after activist investor Elliott Investment Management announced a $4 billion stake in the beverage company and a push for changes.
Among the proposed changes from Elliott are spinning off the North American bottling operations, cutting underperforming brands, reducing manufacturing costs, planning a new strategy, and focusing on core brands to regain market share.
The push for changes comes with PepsiCo stock trailing Coca-Cola and the company also losing market share in the U.S. soda sector, with the Pepsi brand now ranking fourth in U.S. sales, trailing Coca-Cola, Dr Pepper and Sprite.
Pepsi recently announced an agreement with Celsius Holdings (NASDAQ:CELH) that will expand the beverage giant's distribution.
Investors and analysts will be looking to hear how the partnership is helping Pepsi in the non-carbonated soda market.
Another area to watch will be the company's international markets. CEO Ramon Laguarta highlighted the company's strong momentum for international in the second quarter, with International Beverages up 3% year-over-year and Europe, Middle East and Africa sales up 8% year-over-year.
"We will continue to build upon the successful expansion and growth of our international business and accelerate initiatives to improve our North America business performance," Laguarta said at the time.
The company raised its full-year earnings per share guidance after second-quarter results. Analysts and investors will be watching to see if guidance gets raised again.
PEP Price Action: Pepsi stock is down 1% to $139.32 on Wednesday, versus a 52-week trading range of $127.60 to $177.50. Pepsi stock is down 8.4% year-to-date in 2025. The company trails the 7% year-to-date return of rival Coca-Cola, which reports its quarterly results on Oct. 21.
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