PepsiCo, Inc. (NASDAQ: PEP) shares are trading slightly higher on Friday.
The global leader in snacks and beverages remains a “defensive” play in a U.S. slowdown, though less so than in past recessions, given stretched Frito-Lay pricing.
See how PEP stock is doing here.
BofA Securities analyst Peter T. Galbo reiterated the Neutral rating on the stock, with a price forecast of $150.
Galbo still sees the company positioned to deliver steady shareholder returns by balancing growth with dividends and share repurchases.
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The firm will issue its third-quarter 2025 financial results on Thursday, Oct. 9, 2025.
The analyst maintains a third-quarter EPS estimate of $2.26, and updates his model to reflect lower third-quarter gross margins from tariff pressure, with mitigation expected to begin next quarter.
The analyst trims corporate expense and the effective tax rate to offset, and lowers the IB franchise organic sales outlook to flat from up 3% year over year due to weather in Mexico, Brazil and India.
That change reduces total company third-quarter organic sales to 1.8% from 2%.
Galbo sees limited risk of further sales or EPS revisions as the quarter largely played out as expected, but says fundamentals in PepsiCo’s core businesses, including PFNA, have yet to reaccelerate, keeping sentiment muted.
The analyst writes, PepsiCo Foods North America is showing sluggish sales as the company laps last summer’s promotions. NielsenIQ scanner data for the third quarter of 2025 was largely unchanged from the second quarter and the first half.
At Frito-Lay, PepsiCo cycled difficult comparisons tied to July 4 promotions in summer 2024.
Quaker continues to face easier comparisons following recall-related disruptions through the end of 2025. Frito-Lay reports a “hollowing” of middle-tier price points: premium brands such as Miss Vickie’s and Siete are performing well, as are value labels like Santitas and Chester’s.
By contrast, midprice staples — Lay’s, Tostitos and Doritos — continue to post meaningful year-over-year declines in the scanner data, Galbo adds.
PEP Price Action: PEP shares are trading higher by 0.20% to $140.20 at publication on Friday.
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