Investors in PepsiCo, Inc. (NASDAQ: PEP) have seen the story around the stock shift dramatically since November 21, 2025, as activist pressure, a sweeping product overhaul and fresh guidance reshaped expectations for 2026 and beyond.
As of December 11, 2025, PepsiCo shares trade around $149.70, leaving the stock slightly negative year‑to‑date (about –1.6%) and down roughly 4.5% over the past 12 months, within a 52‑week range of about $127.60 to $160.15. [1]
At the same time, the company is:
- Cutting about 20% of its U.S. product lineup and lowering prices as part of a deal with activist investor Elliott Investment Management. [2]
- Reaffirming a defensive dividend profile with a forward yield around 3.8–3.9% and continued dividend growth. [3]
- Guiding to flat 2025 earnings vs. 2024 and 2–4% organic revenue growth in 2026 as cost savings and portfolio changes kick in. [4]
Here’s how the news, forecasts and analysis since November 21, 2025 fit together for PEP stock.
1. How PepsiCo Stock Has Moved Since November 21, 2025
On November 21, 2025, PepsiCo closed in the high‑$140s (around $148–149), with roughly 7.9 million shares changing hands. [5] The price today — just under $150 — means the stock has essentially moved sideways in absolute terms, even though the narrative has changed substantially.
A few key performance markers as of December 11:
- YTD total return: about –1.6%
- 1‑year performance: roughly –4.5%
- 5‑year performance: low‑single‑digit positive total return, highlighting a sluggish stretch for what is usually considered a “steady eddy” consumer staple. [6]
The combination of mild price weakness and a rising dividend has left the dividend yield notably above its long‑term average, which is one reason income‑focused investors continue to watch the stock closely. [7]
2. November 21: Analyst Calls and Fresh Skepticism
November 21, 2025 was an inflection point more for sentiment than for price.
Piper Sandler trims its target, stays bullish
On that date, Piper Sandler:
- Reiterated an Overweight rating on PEP
- Trimmed its price target from $162 to $161
- Highlighted an average one‑year price target of about $160.40, implying roughly 10% upside from a then‑recent close around $146. [8]
The note also referenced projected annual revenue of about $94.4 billion and non‑GAAP EPS around $8.52, reinforcing the view that PepsiCo still offers steady, if unspectacular, growth. [9]
“Read This Before Buying PepsiCo Stock”
On the same day, a widely circulated Motley Fool article titled “Read This Before Buying PepsiCo Stock” argued that PepsiCo had been a disappointment in 2025, underperforming its peer group and broader market, but still offered attractions:
- Modest share‑price performance (down a bit more than 2% YTD at that time)
- A long record of dividend growth
- A global portfolio of brands and resilient cash flows. [10]
The takeaway: quality business, but not cheap and not particularly exciting on growth — a theme you’ll see repeated in subsequent analysis.
Valuation flags and mixed flows
Other coverage around November 21 added nuance:
- A valuation screen from MarketSmojo classified PepsiCo as expensive vs. the S&P 500, citing a P/E in the low‑20s and a negative YTD return of about –4.3%. [11]
- A MarketBeat note reported that EFG Asset Management Americas Corp had trimmed its PEP position, while congressional trade disclosures show several members of Congress took relatively small long and short‑term positions around the same period — activity that is interesting, but tiny relative to PepsiCo’s >$200 billion market cap. [12]
In short, November 21 crystallized a consensus: PepsiCo looked defensive but fully valued, and investors were waiting for a catalyst.
They didn’t have to wait long.
3. Elliott’s $4 Billion Stake and PepsiCo’s 20% SKU Cull
The activist campaign
In September 2025, Elliott Investment Management revealed roughly a $4 billion stake in PepsiCo, arguing the company had underperformed rivals like Coca‑Cola and needed to sharpen its strategy, including potentially outsourcing bottling and pruning underperforming assets. [13]
By early December, reports from Reuters, The Wall Street Journal, and others indicated the two sides were close to a settlement. [14]
That settlement is now public:
- PepsiCo has agreed to cut costs aggressively
- Simplify its portfolio and reduce snack prices
- Continue a board refresh, though Elliott does not get a board seat. [15]
Cutting ~20% of products and closing plants
The most eye‑catching part of the plan: PepsiCo will eliminate nearly 20% of its U.S. product offerings by early 2026, affecting hundreds of snack and beverage SKUs. [16]
Key points:
- The cuts will focus on slow‑moving or overlapping flavors and pack sizes, clearing shelf space and manufacturing capacity.
- PepsiCo will close three plants, including two Frito‑Lay facilities in Orlando and one in New York, affecting more than 400 employees, with transition support pledged. [17]
- Savings will be redirected into marketing, innovation, and sharper price/value “pack architecture” — for example protein‑enriched Doritos and Cheetos without artificial additives, and a new prebiotic cola. [18]
PepsiCo and Elliott both emphasize that the goal is to revive volumes in price‑sensitive categories and unlock productivity savings. Several reports note that PepsiCo expects record productivity gains in 2026 alongside the SKU rationalization and automation push. [19]
Growth and margin targets
In presentations and press releases this month, PepsiCo has:
- Reiterated 2–4% organic revenue growth for 2026
- Signaled that 2025 core EPS will decline only about 0.5%, an improvement from previous guidance of a 1.5% decline
- Framed the Elliott agreement as accelerating existing plans to “invest in affordability, accelerate innovation and aggressively reduce costs.” [20]
For PEP stockholders, the message is clear: near‑term disruption, long‑term efficiency.
4. Earnings Guidance, Dividend Strength and Valuation
Q3 2025: steady, not spectacular
PepsiCo’s Q3 2025 results, released in mid‑October, set the baseline for current expectations:
- Revenue: about $23.9 billion
- Core EPS:$2.29
- Management reaffirmed 2025 guidance for low‑single‑digit organic revenue growth and core constant‑currency EPS roughly flat year‑on‑year, helped by a more favorable currency outlook. [21]
CEO Ramon Laguarta has repeatedly stressed two priorities: accelerating growth and “right‑sizing” the cost base — themes that map directly to the post‑Elliott restructuring. [22]
2025 EPS guidance and a rich dividend
On December 9, 2025, PepsiCo issued FY 2025 EPS guidance of $8.12, slightly above the consensus estimate of $8.11, while declining to provide formal revenue guidance. [23]
At the same time, the board:
- Declared a quarterly dividend of $1.4225 per share
- Which annualizes to about $5.69
- Implies a forward yield around 3.8–3.9% at current prices, with a payout ratio a bit above 100% on trailing earnings. [24]
PepsiCo is a Dividend King, having raised its dividend for 53 consecutive years, and a November announcement confirmed another ~5% increase to its quarterly payout heading into 2026. [25]
Is PEP cheap or expensive?
Valuation is where opinions diverge the most.
Recent data show:
- A trailing P/E ratio around 28–28.5x, based on a share price near $149.70 and trailing‑twelve‑month EPS of roughly $5.25–5.27. [26]
- That multiple is about 11% above PepsiCo’s 10‑year average P/E near 25.5x, and higher than its 3‑ and 5‑year averages as well. [27]
Dividend and valuation metrics:
- Forward dividend yield: ~3.8–3.9%, among the higher yields in global consumer staples
- 5‑year average yield: closer to 3.0–3.3%, meaning today’s yield is elevated relative to history
- Over 50 years of dividend growth, with recent annual increases around 6–7%. [28]
So PEP currently looks like a high‑quality, income‑oriented stock at a premium earnings multiple but with an above‑average yield — a mix that some see as justified, others as stretched.
5. Wall Street Forecasts and Rating Changes Since November 21
Despite the turbulence, Wall Street remains broadly constructive on PEP.
Consensus targets
Recent forecast snapshots show:
- StockAnalysis.com: 15 covering analysts, “Buy” consensus, average price target $159.6, implying about 6.6% upside over 12 months, with a range of $140 to $178. [29]
- MarketWatch: 24 analysts, “Overweight” average recommendation and $156.74 average target. [30]
- Nasdaq / Fintel aggregation (as of mid‑November): average one‑year target about $160.40, with a low near $118 and a high around $180.60, suggesting almost 10% upside at November price levels. [31]
- Yahoo Finance: a 1‑year target estimate around $155.14 from its contributing analysts. [32]
In other words, most analysts see mid‑single‑digit to low‑double‑digit upside, assuming PepsiCo executes on its cost and growth plans.
Rating moves after November 21
Since November 21:
- Piper Sandler:
- JP Morgan: Upgraded PepsiCo and lifted its price target to $164, signaling a more positive stance on near‑term execution. [35]
- Wall Street Zen (via MarketBeat): Upgraded PEP from “Hold” to “Buy” on November 29, 2025. [36]
- Independent research / Seeking Alpha: A notable piece titled “PepsiCo: Earnings May Fizz Now, But The Long‑Term Upside Still Pops” rates the stock a buy with a $168.42 target, citing about 2.6% revenue growth and robust cash generation. [37]
Overall, the post‑November 21 analyst drumbeat has turned slightly more bullish, especially after the Elliott settlement and cost‑cut plan were revealed.
6. What Commentators Are Saying: Bull vs Bear Case
The bullish view
Pro‑PEP arguments in recent research and commentary tend to focus on:
- Global scale and brand power across snacks and beverages
- Resilient international growth, even as North American categories soften
- A visible cost‑savings runway tied to plant rationalization, SKU cuts and automation
- A nearly 4% dividend yield growing mid‑single digits yearly, backed by strong free cash flow. [38]
From this angle, PepsiCo looks like a defensive compounder: not a rocket ship, but a business that can deliver mid‑single‑digit revenue growth, a bit more than that in EPS, and a meaningful cash return to shareholders.
The cautious view
More cautious takes — including those from Motley Fool and valuation‑driven sites — highlight that:
- PepsiCo’s P/E multiple sits above its own long‑term average, and in some models looks fully valued or overvalued versus the broad market. [39]
- The stock’s recent price returns lag the S&P 500, making the opportunity cost of owning a “slow grower” more obvious. [40]
- The SKU cuts and plant closures carry execution risk: cut the wrong products, or mishandle supply chain changes, and you risk losing shelf space and consumer goodwill. [41]
There’s also competitive pressure: Coca‑Cola is changing leadership and has outperformed PepsiCo recently with a strong focus on zero‑sugar and value‑tier offerings, putting a spotlight on PepsiCo’s beverage strategy. [42]
7. Key Opportunities and Risks for PEP Investors Now
Opportunities
- Productivity upside: If PepsiCo successfully executes on its 20% SKU reduction, automation and plant rationalization, 2026 could indeed be a “record year of productivity savings,” supporting margin expansion. [43]
- Volume recovery via value: Lower prices and simplified ingredient lists can help bring back price‑sensitive consumers, particularly in snacks. [44]
- Dividend‑driven total return: A nearly 4% yield plus even modest mid‑single‑digit EPS growth can add up to respectable total returns for long‑term holders. [45]
Risks
- Execution risk: Plant closures and portfolio cuts can create operational hiccups, from supply shortages to retailer pushback.
- Brand risk: Headlines about “hundreds of fan‑favorite snacks disappearing” show that SKU cuts can spark consumer backlash if not carefully managed. [46]
- Valuation compression: If interest rates stay high or growth disappoints, a P/E near 28x could compress toward PepsiCo’s historical averages, limiting upside even if fundamentals are stable. [47]
- Competition & regulation: Ongoing shifts toward healthier eating, sugar taxes and powerful rivals mean PepsiCo must execute its “better ingredients, better value” pivot flawlessly.
8. Bottom Line: What November 21 Set in Motion
Since November 21, 2025, PepsiCo’s story has evolved from “steady, slightly overpriced dividend stock” to “restructuring value with activist oversight.”
- Stock performance is still muted, but sentiment has brightened as Wall Street digests the Elliott deal and 2026 plan. [48]
- Analysts now broadly expect mid‑single‑digit upside over the next year, with price targets clustered in the mid‑$150s to high‑$160s. [49]
- Dividend investors see a nearly 4% yield, 50+ years of raises, and a company explicitly committed to cash returns even as it revamps its portfolio. [50]
For growth‑hungry traders, PEP may still look a bit sleepy. For income‑oriented investors willing to weather a complex restructuring and some near‑term earnings noise, PepsiCo now offers:
- A stronger cost‑saving roadmap
- Clearer growth targets for 2026
- And a defensive, cash‑generating profile that November 21’s flurry of reports and ratings only helped bring into focus.
References
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