PepsiCo Downgraded to Hold
Deutsche Bank downgrades PepsiCo and cuts price target citing North American turnaround doubts.
Anonymous
Deutsche Bank downgraded PepsiCo from Buy to Hold and cut its price target from $155 to $138, citing doubts about a sustained turnaround in North America, particularly in its Foods business. Analyst Stephen Powers said efforts such as lower prices, product innovation and improved distribution have produced mixed or short-lived gains, while weak demand and higher costs complicate recovery. He also lowered his earnings estimates, placing his 2027 forecast below Wall Street’s consensus, and flagged risks to international growth. Other indicators cited in coverage were more favorable, including PepsiCo’s dividend yield and financial-health score, but the central concern was whether the company can restore momentum in its North American operations.
Key Points
1
PepsiCo shares were down about 8% year to date, and fell roughly 0.8% on the day the downgrade was reported.
2
Powers cut his FY26 EPS estimate slightly, to $8.55 from $8.58, in addition to lowering his FY27 forecast.
3
Powers said the company’s initial diagnosis of its North American problems was incomplete and that management still lacks a clear recovery plan.
4
GuruFocus reported that PepsiCo insiders had sold $6.2 million of shares over the prior 12 months, with no insider purchases during that period.
5
Despite the downgrade, GuruFocus reported that 21 premium gurus held PepsiCo shares; 11 had recently added to their positions and three had trimmed them.
Sentiment
Mostly NegativeNEGATIVENEUTRALPOSITIVE
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