PepsiCo (PEP) Stock on December 2, 2025: F1 Mega-Deal, Activist Pressure, Dividend Strength and What Analysts Expect Next

Date: December 2, 2025
Ticker: PepsiCo, Inc. (NASDAQ: PEP)

Key takeaways

• Share price today: PepsiCo trades around $148–$149 per share, slightly lower on the day and roughly 9% below its 52‑week high near $163.65. ^[1]
• Fresh headline news (today): A multi‑year global partnership with the Mercedes‑AMG PETRONAS F1 Team starting in 2026, showcasing Gatorade, Sting and Doritos on one of the most watched stages in global sport. ^[2]
• Institutional flows: Big money remains very active in PEP – some funds trimming exposure while others materially increase stakes, with institutional ownership around 73%. ^[3]
• Fundamentals: Q3 2025 showed modest revenue and core EPS beats, but reported operating income fell about 56% due to $1.9 billion in brand impairment charges, making 2025 a “reset” year. ^[4]
• Dividend: About $5.69 per share annually, a yield near 3.8–3.9%, with 53 consecutive years of dividend increases, but a trailing payout ratio above 100% on reported earnings. ^[5]
• Forecasts: Wall Street consensus 12‑month targets cluster in the mid‑$150s to around $160, implying mid‑single‑digit price upside plus the dividend. ^[6]
• Big themes: Activist investor Elliott Investment Management’s ~$4 billion stake, GLP‑1 weight‑loss drugs, and shifting consumer health trends are now central to the PEP investment story. ^[7]

PepsiCo stock today: price, performance and valuation

As of late trading on December 2, 2025, PepsiCo shares change hands around $148.68, down a fraction on the day.

Recent data from institutional filings shows PEP:

• 52‑week range: about $127.60–$163.65.
• Market capitalisation: roughly $200–207 billion depending on the exact intraday price. ^[8]
• Valuation:
  • Trailing P/E roughly 28x on GAAP earnings. ^[9]
  • Forward P/E around 17–18x, based on Koyfin’s forward estimates. ^[10]
• Balance sheet snapshot: debt‑to‑equity about 2.26, current ratio 0.91, quick ratio 0.72 – typical for a highly cash‑generative consumer‑staples name that uses leverage to enhance returns. ^[11]

Technically, StockInvest now labels PepsiCo a “sell candidate” after a multi‑day rally, even though it sits in a “wide and weak rising trend.” Their model projects roughly 3% upside over the next three months, with a high probability of trading between about $146 and $161 by that time. ^[12]

For traders, that suggests low volatility but limited near‑term upside. For long‑term investors, the more important questions are about earnings, dividends and structural change.

Big news today: F1 partnership supercharges brand visibility

The headline corporate news on December 2, 2025 is PepsiCo’s announcement of a landmark global partnership with the Mercedes‑AMG PETRONAS Formula 1 Team, beginning with the 2026 season. ^[13]

Key elements:

• Brands involved:
  • Gatorade – bringing its sports‑science‑driven hydration platform into the F1 paddock.
  • Sting – PepsiCo’s high‑growth energy drink in markets like India, Pakistan, Vietnam and Egypt.
  • Doritos – leveraged for bold, fan‑facing activations at race weekends. ^[14]
• Scope: multi‑year, global agreement aligned with F1’s expansion in high‑growth regions where Sting and other PepsiCo brands are already strong. ^[15]

From an equity perspective, this deal:

• Deepens PepsiCo’s presence in performance and energy beverages, a category likely to be more resilient as GLP‑1 drugs impact traditional soda and snack consumption. ^[16]
• Strengthens youth‑oriented and emerging‑market positioning, especially where F1 viewership is growing quickly.

The financial impact is not quantified, but for a company of PepsiCo’s size this is best viewed as a brand‑equity and category‑growth lever, not an immediate EPS driver.

Institutional investors: active, not absent

Several new 13F filings published today and over the past 24 hours show how large investors are repositioning around PEP:

• Arrowstreet Capital
  • Increased its stake by 19% in Q2 to about 7.48 million shares, roughly 0.55% of PepsiCo and valued near $988 million. PEP is now Arrowstreet’s 21st‑largest holding. ^[17]
• OMERS Administration Corp
  • Trimmed its position by about 1.7%, selling 2,100 shares in Q2 and ending with 119,218 shares worth roughly $15.7 million. ^[18]
• Wealthedge Investment Advisors LLC
  • Initiated a new position of 9,175 shares, about $1.21 million at the time of purchase. ^[19]
• TradeLink Capital LLC
  • Took a new 2,500‑share position, roughly $330,000, representing about 1% of its portfolio and ranking as its 28th‑largest holding. ^[20]

Across these and related filings, MarketBeat calculates that institutional and hedge‑fund ownership stands around 73% of outstanding shares, underlining PEP’s status as a core institutional staple rather than an abandoned name. ^[21]

The message: big money is actively trading around PepsiCo but remains heavily invested overall.

Q3 2025 earnings: a reset year with big impairments

PepsiCo’s Q3 2025 results remain the anchor for current forecasts and today’s valuation debate.

Headline numbers

Recent coverage citing company results and filings highlights: ^[22]

• Net revenue: about $23.94 billion, slightly above consensus estimates around $23.8 billion.
• Organic revenue growth: roughly 1–1.3%, with total reported revenue up about 2.6–2.7% year over year. ^[23]
• Core EPS: around $2.29, topping expectations near $2.26. ^[24]
• Reported EPS and operating income:
  • Operating income fell to about $1.8 billion, a drop of ~56% year on year, driven primarily by approximately $1.9 billion in non‑cash brand impairment charges on underperforming assets like Rockstar and Be & Cheery. ^[25]

In other words, underlying performance beat expectations modestly, but large write‑downs made the GAAP numbers look ugly.

Volumes vs pricing

Across Q3 commentary:

• Overall food and beverage volumes were down roughly 1%, reflecting consumer pushback after several years of price increases. TechStock²+1
• North American foods (snacks) saw low‑single‑digit revenue decline, while North American beverages managed low‑single‑digit revenue growth despite weaker volumes. ^[26]
• International regions, particularly EMEA, helped offset softness in developed markets, with some geographies posting mid‑single‑digit organic growth. ^[27]

Guidance: 2025 as a “dig‑out and reset” year

Management and analyst coverage frame 2025 as a reset: ^[28]

• Organic revenue growth goal: low single digits (roughly 2–4%).
• Core EPS outlook: essentially flat year over year, versus earlier expectations for mid‑single‑digit growth.
• Headwinds include tariffs, supply‑chain costs, weaker volumes and macro uncertainty.

Cost cuts, portfolio pruning and digital transformation are intended to create a base for better margin expansion and EPS growth in 2026 and beyond, rather than a blockbuster 2025.

Strategy for 2025–2026: cost cuts, innovation and PBNA margins

PepsiCo’s 2025 playbook, highlighted in recent analysis, can be boiled down to: “aggressive cost reduction + accelerated innovation.” ^[29]

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Key strategic pillars:

• “One PepsiCo” & productivity:
  • Integration of snacks and beverages, plant consolidations, automation and AI‑driven logistics.
  • AInvest reports the company expects about 70% more cost savings in the second half of 2025 vs. the first, as initiatives ramp. ^[30]
• PBNA (PepsiCo Beverages North America) margin ambition:
  • Zacks notes management is targeting mid‑teens operating margins in PBNA by 2026, supported by cost cuts and mix improvement. ^[31]
  • The Zacks Consensus currently implies a slight EPS decline (~0.7%) in 2025, with ~5.9% EPS growth in 2026 as savings and pricing actions flow through. ^[32]
• Shift from pure pricing to affordability and innovation:
  • After substantial price increases in 2022–2024, management is leaning more on value packs, portion sizes, and “permissible” snack and beverage innovations (e.g., Pepsi Zero Sugar, Simply branded snacks) to retain cost‑conscious consumers. ^[33]

The net effect: 2025 is about absorbing impairments and laying groundwork, while 2026+ is supposed to show the margin and EPS payoff.

Activist investor Elliott: the structural shake‑up wildcard

One of the biggest developments in 2025 for PEP is the arrival of Elliott Investment Management as an activist shareholder.

• On September 2, 2025, Elliott disclosed a roughly $4 billion stake in PepsiCo, one of its largest positions. ^[34]
• In public letters and presentations, Elliott calls PepsiCo a “dramatic underperformer” relative to peers and argues that a mix of portfolio restructuring, cost cuts and capital allocation changes could lift the share price by more than 50% over time. ^[35]

Broad elements of Elliott’s agenda (from its materials and media coverage) include: ^[36]

• Reviewing or refranchising North American beverage bottling and distribution.
• Exiting or repositioning weaker brands and leaning harder into higher‑growth platforms like energy, functional beverages and better‑for‑you snacks.
• Driving higher operating margins and return on capital, particularly in lagging segments.

Not all shareholders are thrilled:

• A later Reuters piece notes some investors are cautious about spinning out bottling operations, worried about execution risk and long‑term control of the value chain. ^[37]

PepsiCo management has responded by emphasising its existing productivity initiatives, while signalling a willingness to engage with Elliott. ^[38]

For investors, the takeaway is that activism adds both risk and potential reward:

• It may increase headline volatility and restructuring noise.
• But it could also accelerate portfolio rationalisation and margin expansion, potentially justifying a higher valuation multiple if executed well.

Analyst ratings, price targets and valuation views

Street consensus

Different data providers show slightly different numbers, but they cluster tightly:

• MarketBeat:
  • 22 analysts, average 12‑month price target $156.90 (range $117–$178), implying around 5–6% upside from current levels. ^[39]
• StockAnalysis:
  • 14 analysts, consensus rating “Buy”, average target $157.79 (roughly 7–8% upside), range $140–$178. ^[40]
• Nasdaq / Piper Sandler compilation:
  • As of mid‑November, a blended average one‑year target near $160.40, representing almost 10% upside vs the then‑current price around $146. ^[41]

Overall, Wall Street’s stance can be summarised as “cautiously constructive”:

• Not a deep value play on consensus numbers.
• But also far from a “sell” – more of a steady, income‑oriented compounder with mid‑single‑digit expected total returns if things go roughly to plan.

Recent rating and target changes

Recent moves underline the mixed tone:

• Piper Sandler
  • Cut its PEP target from $162 to $161 while keeping an Overweight rating, explicitly citing GLP‑1 weight‑loss drugs as a structural headwind for sugary drinks and snacks.
  • The research estimates GLP‑1 use could create a 60–140 basis point annual volume headwind for high‑sugar, high‑carb foods in PepsiCo’s portfolio and slightly trimmed its 2026 EPS forecast (to about $8.73). ^[42]
• Other brokers (via GuruFocus and MarketBeat):
  • Freedom Capital Markets downgraded PEP from Buy to Hold with a target around $164.
  • Wells Fargo maintained Equal‑Weight with a modest target increase to $154.
  • JPMorgan kept a Neutral rating while lowering its target to about $151. ^[43]

Independent valuation takes

External platforms provide additional colour:

• Simply Wall St:
  • A DCF‑based model estimates intrinsic value around $246.92 per share, implying about 39.5% upside and labelling PEP “undervalued” on that method. ^[44]
  • At the same time, they note PEP’s P/E near 28.6x is above the beverage‑sector average (~18x), though only slightly above their own fair‑value multiple (27x), which makes the stock look only modestly expensive on earnings multiples. ^[45]
• StockInvest (technical)
  • Rates PEP a Sell candidate in the very short term despite positive moving‑average signals, mostly due to unfavourable risk/reward close to near‑term resistance. ^[46]

Put together, valuation opinions range from “mildly pricey on P/E” to “deeply undervalued on long‑term cash flows”, reflecting different assumptions about growth, margins and discount rates.

Dividend profile: near‑4% yield, 53‑year streak – and a stretched payout

For many investors, PEP is first and foremost a dividend stock.

Current terms

Recent dividend data show: ^[47]

• Quarterly dividend:$1.4225 per share.
• Annualised dividend: roughly $5.69 per share (four quarterly payments).
• Next ex‑dividend date:December 5, 2025.
• Next payment date:January 6, 2026.
• Indicated yield: roughly 3.8–3.9% at current prices.
• Dividend growth streak: about 53 consecutive years of increases.
• Recent growth: dividend per share has grown around 6–8% annually over 1, 3, 5 and 10‑year horizons. ^[48]

Payout ratio and sustainability

Here’s where things get more nuanced:

• Koyfin and other GAAP‑based data sets put PepsiCo’s trailing payout ratio around 104–108% of net income, reflecting the hit from 2025 impairment charges. ^[49]
• GuruFocus, which focuses on core EPS without non‑recurring items, calculates a payout ratio nearer 65% for 2024 and about 72% for Q3 2025, a more comfortable level for a mature consumer‑staples giant. ^[50]

In plain language:

• On headline GAAP numbers, PepsiCo is currently paying out more than it earns, which limits room for aggressive buybacks or big dividend hikes if earnings stagnate. TechStock²+1
• On underlying, adjusted earnings, the dividend still looks reasonably covered, but EPS growth and free‑cash‑flow improvement need to show up in 2026–27 to keep that coverage comfortable.

For now, with strong cash generation, an investment‑grade balance sheet and a multi‑decade track record, most analysts do not see an imminent dividend cut – but they do see the payout as a constraint on capital‑allocation flexibility. TechStock²+1

Key risks investors are watching

Recent research and news coverage point to several recurring risk themes:

1. GLP‑1 weight‑loss drugs
   • Drugs from Eli Lilly and Novo Nordisk are expected to reduce caloric intake and snacking for a subset of consumers, a risk highlighted by Piper Sandler and others. ^[51]
   • Piper estimates a potential 60–140 bps annual volume headwind for high‑sugar and high‑carb categories in PepsiCo’s portfolio. ^[52]
2. Structural shifts in consumer preferences
   • Health‑oriented trends, sugar‑reduction efforts and regulatory scrutiny of ultra‑processed foods all point toward slower long‑term volume growth for traditional soda and salty snacks. TechStock²+2Yahoo Finance+2
3. Tariffs, input costs and FX
   • Higher tariffs on packaging and ingredients, plus currency volatility in key markets, have already led to profit guidance cuts and could continue to pressure margins if not offset by productivity. ^[53]
4. High dividend payout
   • A payout ratio above 100% on reported earnings leaves less room for error if margins disappoint again, and may limit buyback capacity without incremental leverage. ^[54]
5. Execution risk on activism and restructuring
   • Elliott’s proposals around bottling, portfolio pruning and cost cuts could create significant long‑term value – or, if mis‑timed or poorly executed, disrupt operations and erode near‑term profitability. ^[55]

Potential upside drivers

On the other side of the ledger, bullish commentators highlight several potential catalysts:

1. Margin expansion and productivity
   • If PepsiCo delivers mid‑teens PBNA margins by 2026 and continues “One PepsiCo” savings, EPS could re‑accelerate even on low‑single‑digit revenue growth. ^[56]
2. Activist‑driven portfolio reshaping
   • Elliott’s pressure may spur faster action on exiting underperforming brands, simplifying operations and refranchising assets, which could unlock value and support a higher multiple if investors gain confidence in the plan. ^[57]
3. International and category growth
   • PepsiCo still has room to grow in emerging markets, particularly with brands like Sting, Gatorade and Doritos, and in categories aligned with health and performance rather than indulgence alone. The F1 partnership is one visible step in that direction. ^[58]
4. Defensive profile and dividend appeal
   • In a world of persistent macro uncertainty, investors often pay up for stable cash flows and dependable dividends, and PEP’s ~4% yield plus low beta (~0.45) enhance its appeal as a defensive core holding. ^[59]

Bottom line: how PEP’s setup looks at the start of December 2025

Putting everything together:

• Valuation:
  • Around $148–$149, PEP trades on roughly 28x trailing and high‑teens forward earnings, with consensus targets suggesting mid‑single‑digit price upside and a 3.8–3.9% dividend yield. ^[60]
• Narrative:
  • 2025 is a reset year – impairments, flat EPS, modest revenue growth and heavy investment in productivity.
  • 2026–2027 are where the Street expects to see margin expansion, healthier EPS growth and clearer results from activism and restructuring. ^[61]
• Risk/reward trade‑off:
  • Risks: GLP‑1 headwinds, slowing volumes, a high payout ratio and execution risk on any structural changes.
  • Rewards: iconic global brands, strong cash generation, a multi‑decade dividend record, activist pressure to improve returns, and added marketing firepower from moves like the Mercedes‑AMG PETRONAS F1 deal.

For short‑term traders, PEP looks like a low‑beta, news‑driven name whose bigger moves may cluster around earnings, activist headlines and macro news on tariffs or GLP‑1 uptake.

For long‑term, income‑oriented investors, the stock continues to be framed as a steady but slower‑growing dividend compounder. The central question heading into 2026 is whether management – and now Elliott – can reboot growth and margins without sacrificing that prized dividend track record.

Important: This article is for informational purposes only and does not constitute financial, investment or trading advice. Always conduct your own research and consider consulting a licensed financial adviser before making investment decisions.

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