PepsiCo, Inc. (NASDAQ:PEP) shares rose on Friday as investors focused on its product refreshes, wellness-focused innovations, and plans for steady, sequential growth across snacks and beverages.
On Thursday, the food and beverage giant reported third-quarter adjusted earnings per share of $2.29, beating the analyst consensus estimate of $2.26.
Quarterly sales of $23.937 billion (+2.6% year over year) outpaced the Street's expectation of $23.827 billion.
Also Read: PepsiCo Posts Tepid Q3, Analyst Expects ‘Inflection’ In Q4
Analyst Take
Bank Of America Securities analyst Peter T. Galbo reiterated the Neutral rating on the stock, raising the price forecast from $150 to $155.
Galbo said he nudged his fiscal year 2025 EPS estimate to $8.12 from $8.04 after the beat and a softer foreign exchange drag, and argued that near-term share performance will hinge on whether North America organic sales improve with fourth-quarter product launches and relaunches.
The analyst noted PFNA sales, including Siete, were flat year over year despite weakness in salty snacks, while PepsiCo aims for sequential organic growth via restaging Lay's and Tostitos (no artificial colors or flavors and new packaging), health-and-wellness innovation across Doritos, Quaker, SunChips, PopCorners and Smartfood, and a focus on consumer value.
The analyst stated that PBNA underlying volumes fell only 1% YoY (excluding a 300 bps drag from exiting case-pack water) and management plans to reaccelerate with a new Muscle Milk formulation and innovation across Gatorade, Pepsi and Mountain Dew.
The analyst notes that he has updated the fiscal year 2026 quarterly organic growth cadence to +2.1%/+2.4%/+3.6%/+3.9%, indicating sequential improvement and reaching the low end of the algorithm by the fourth quarter.
He also inched up fiscal year 2026 and fiscal year 2027 EPS to $8.60 and $9.10, respectively.
Overall, the analyst views PepsiCo's business as still defensive into a U.S. slowdown, though less than in past recessions, given stretched Frito pricing.
Even so, PepsiCo can continue to deliver steady shareholder returns, striking a balance between growth and dividends and buybacks.
PEP Price Action: PepsiCo shares were up 3.61% at $149.94 at the time of publication on Friday, according to Benzinga Pro data.
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