PepsiCo (PEP) Stock Today: Elliott Deal, JPMorgan Upgrade and Dividend Jitters

Date: December 10, 2025 – This article is for information only and is not financial advice.

PepsiCo (PEP) Stock Price Snapshot on 10 December 2025

PepsiCo, Inc. (NASDAQ: PEP) is trading around $149 per share today, up roughly 3% from yesterday’s close of $144.64 after a wave of fresh analyst calls and new details on its cost‑cutting deal with activist investor Elliott Investment Management. ^[1]

Key current metrics:

Share price: about $149 intraday
Market cap: ≈ $206 billion ^[2]
52‑week range:$127.60 – $160.52 ^[3]
EPS (TTM): about $5.26; P/E ~28x; forward P/E ~18x ^[4]
Annual dividend:$5.69 per share, implying a 3.8–3.9% yield at today’s price ^[5]
Beta: roughly 0.42, highlighting its defensive, low‑volatility profile ^[6]

Over the last 12 months, PepsiCo shares are down high single digits, with a 52‑week price change of about –8%, while rival Coca‑Cola is up low double digits over the same span. ^[7] Year‑to‑date, StatMuse data shows Coca‑Cola has returned around +16% versus PepsiCo’s roughly flat performance, underlining why activists and some analysts argue that PEP has “lost its fizz” relative to peers. ^[8]

Against this backdrop, three big storylines dominate today’s PEP stock news:

A sweeping cost‑cutting and product rationalization plan negotiated with Elliott Investment Management
A fresh JPMorgan upgrade to Overweight with a $164 price target
A heated debate about dividend sustainability despite PepsiCo’s status as a long‑time Dividend King

Let’s unpack what all of that means for investors watching PepsiCo stock right now.

Elliott Investment Management Forces a Major Reset

From two plant closures to a 20% SKU cut

Elliott Investment Management disclosed a roughly $4 billion stake in PepsiCo in September, accusing the company of decelerating growth, eroding profitability in North America and underperformance vs. Coca‑Cola. ^[9]

Under pressure, PepsiCo has escalated a restructuring that is now front‑and‑center in the share‑price story:

Initially, in its Q3 2025 results, PepsiCo said it would close two plants and cut about 15% of its product lines in the U.S. snacks business as part of an aggressive cost‑reduction program, while offering smaller pack sizes to help strained consumers. ^[10]
That plan has since expanded. Multiple outlets now report that PepsiCo will eliminate nearly 20% of its U.S. snack and soda SKUs by early 2026, close at least three manufacturing plants and shut additional lines. ^[11]

Fox Business, for example, reports that PepsiCo will remove hundreds of products from shelves, reducing nearly 20% of its U.S. SKUs while also planning more affordable price options to boost purchase frequency for mainstream brands. ^[12] Some Frito‑Lay plants in Florida, California and New York are among those being shut as the company adjusts to weaker snack demand and changing consumer preferences toward “better‑for‑you” options. ^[13]

Deal terms and guidance for 2026

PepsiCo and Elliott have reached what’s being described as a “collaborative agreement” that bundles together:

SKU rationalization – cutting around 20% of product lines in the U.S.
Plant closures and automation investments to streamline the North American supply chain
Price cuts and value‑focused packs to win back cost‑conscious shoppers
A preliminary 2026 outlook emphasizing modest growth and margin expansion ^[14]

Management is now guiding for roughly:

2–4% organic sales growth in 2026
4–6% overall revenue growth
5–7% EPS growth
At least 1 percentage point of margin expansion over the next three years ^[15]

However, major financial publications stress that the market’s reaction has been lukewarm:

Barron’s notes that despite the plan, PepsiCo shares are down nearly 10% over the past year, while Coca‑Cola is up around 12%, and questions whether the company can revive growth and cut costs at the same time without hurting near‑term sales. ^[16]
The Financial Times describes the deal as a “truce” that may be the calm before the storm, since PepsiCo has not fully embraced the more radical structural reforms Elliott wanted—such as divesting bottling operations or shedding non‑core brands like Quaker Oats. ^[17]

In other words, the activist campaign has clearly shaken PepsiCo out of its comfort zone, but it may not be over if the 2026 plan fails to deliver.

JPMorgan Upgrade: Why One Big Bank Turned Bullish

While activists push for deeper change, JPMorgan just flipped its rating on PEP from Neutral/Hold to Overweight/Buy and lifted its price target from $151 to $164, implying around 10% upside from the prior target and mid‑single‑digit upside from today’s price. ^[18]

In a detailed note covered by multiple outlets:

Analyst Andrea Teixeira points to new products, stepped‑up marketing and productivity savings as the key drivers of high‑single‑digit shareholder returns in 2026. ^[19]
JPMorgan argues that PepsiCo still trades at a “steep” discount to peers despite having iconic brands and a strong global footprint, making it attractive if the company executes on its reset. ^[20]

The upgrade was also highlighted in 24/7 Wall St.’s roundup of top Wall Street analyst calls for today, which singled out PepsiCo’s move to Overweight with a $164 target alongside upgrades to several other blue‑chip names. ^[21]

As a result, PEP is catching a relief bid today, with shares up about 3% as traders digest the mix of activist pressure plus fresh big‑bank support. ^[22]

Dividend Story: King, Aristocrat… or at Risk?

A 53‑year streak of increases

PepsiCo is one of the classic dividend stocks in the market:

It has paid uninterrupted quarterly dividends since 1965
2025 marks its 53rd consecutive annual dividend increase, cementing its status as both a Dividend Aristocrat and a Dividend King ^[23]
The company’s most recent declaration set a quarterly dividend of $1.4225 per share, or $5.69 annualized, payable January 6, 2026 to holders of record on December 5, 2025 ^[24]

At today’s price near $149, that works out to a dividend yield of roughly 3.8–3.9%, notably higher than PepsiCo’s five‑year average. ^[25]

The bullish income case

Several research providers still see PepsiCo as a high‑quality income play:

TIKR’s August 2025 analysis highlighted a forward yield close to 4%, near the top of PepsiCo’s historical range, and projected dividend growth of about 5% annually through 2027 with a payout ratio around 69% based on future earnings estimates. ^[26]
Morningstar earlier this year argued that PepsiCo’s financial health, dominant brands (Frito‑Lay, Gatorade, Pepsi, Quaker, Doritos) and pricing power make it a buy‑and‑hold dividend stock for long‑term investors. ^[27]
DividendValueBuilder’s December 2025 report assigns PepsiCo “B” grades for risk, financial strength and business quality and estimates an intrinsic value of about $152 per share, with a “target buy” level around $127 and a “target sell” level near $190. ^[28]

On these numbers, PepsiCo’s current shareholder yield (dividends plus buybacks) is a bit over 4%, supported by stable cash flows in a defensive industry. ^[29]

The emerging bear case: “Dividend on a diet”?

At the same time, dividend risk has become a hotter topic in recent weeks:

A November 17 article on Seeking Alpha titled “PepsiCo: The Dividend King That May Be Forced to Cut Unless Something Big Changes” argued that rising net debt and weaker free cash flow could eventually force management to slow or trim the payout if earnings growth doesn’t accelerate. ^[30]
Today, a newer piece, “PepsiCo: Dividend Likely To Be Put On A Diet – Sell,” reiterated that PepsiCo’s net debt has roughly doubled over the past decade to about $44 billion and flagged the current payout ratio—over 100% of trailing earnings—as unsustainably high if cash flows remain under pressure. ^[31]

StockAnalysis and MarketBeat data bear out the high payout ratio, showing PepsiCo paying out more than 106% of trailing earnings and a similar proportion of free cash flow on a trailing basis. ^[32]

Put simply:

Near‑term safety: PepsiCo’s board just raised the dividend again and is not signaling any immediate cut. The company has every incentive to defend its 50‑plus‑year streak. ^[33]
Medium‑term tension: If the reset plan fails to restore stronger free‑cash‑flow growth, management may need to slow the pace of dividend hikes—or at least use more of the Elliott‑driven savings to shore up the balance sheet rather than increase shareholder payouts further.

For income‑focused investors, the headline yield near 4% is attractive, but it now comes with more debate than usual for a company of PepsiCo’s stature.

Earnings and Fundamentals: What Q3 2025 Told Investors

PepsiCo’s Q3 2025 results, released in October, were neither a disaster nor a home run—more like “better than feared”:

Net revenue: about $23.94 billion, slightly ahead of analyst expectations around $23.83 billion ^[34]
Adjusted EPS: MarketBeat notes $2.29 per share, beating consensus by roughly $0.03 ^[35]
Organic revenue growth: roughly 2–3% year‑on‑year, with price/mix offsetting weaker volumes ^[36]
Volumes: one Yahoo Finance summary highlights about a 3% decline in sales volumes, illustrating that price hikes, not unit growth, drove most of the top‑line gain. ^[37]
Net margin: recent comparison data shows PepsiCo’s net margin around 10.9% versus Coca‑Cola’s nearly 30%, emphasizing how much more profitable its main rival remains. ^[38]

PepsiCo maintained its full‑year 2025 organic sales and profit guidance, but CEO Ramon Laguarta pledged to “aggressively reduce costs”, especially in U.S. snacks—language that foreshadowed the more drastic Elliott-inspired restructuring we’re seeing now. ^[39]

The Q3 numbers paint a picture of a company that’s:

Still growing revenue modestly
Using pricing power to offset volume declines
Facing margin and volume pressure in key categories as consumers trade down or shift to healthier options

That combination helps explain why PEP’s valuation multiple has compressed toward the lower end of large consumer‑staples peers, even before the recent activist noise.

Wall Street Forecasts and Price Targets for PepsiCo Stock

Consensus estimates

Current sell‑side forecasts point to steady but not spectacular growth:

Current quarter (Q4 2025, Dec): EPS consensus around $2.24
Next quarter (Q1 2026, Mar): EPS consensus around $1.57
Full‑year 2025: EPS about $8.11
Full‑year 2026: EPS about $8.58, implying mid‑single‑digit growth ^[40]

If management achieves its 5–7% EPS growth target for 2026 and beyond, today’s forward P/E of roughly 17–18x looks like a reasonable, but not bargain‑basement, valuation for a global brand portfolio with low beta and a decent yield. ^[41]

Analyst ratings and price targets

Different aggregator sites tell a broadly consistent story:

MarketBeat (22 analysts over the past year):
- Consensus rating:Hold
- Split: 1 Sell, 13 Hold, 8 Buy
- Average 12‑month price target:$158.35
- Target range: $117 – $178
- Implied upside from ~$149: about 6% ^[42]
TipRanks:
- Overall consensus: “Moderate Buy”, based on 5 Buys and 8 Holds
- Average price target: about $158.92, suggesting roughly 6–7% upside
- Notes PEP is up ~11% over the last six months, even before today’s bounce. ^[43]
StockAnalysis:
- Labels the analyst stance simply “Buy”
- Shows consensus price target around $159–160, or high‑single‑digit upside. ^[44]

Beyond Wall Street, independent valuation work also weighs in:

DividendValueBuilder’s intrinsic value estimate sits at $152, close to current levels. ^[45]
TIKR’s model suggested potential upside to about $171 by 2027, implying mid‑single‑digit annual total returns (including dividends) from late‑summer price levels. ^[46]

Put together, the message from today’s forecasts is:

PepsiCo is widely seen as a “hold to cautious buy” with modest upside—not a deep value play, but potentially attractive if the Elliott‑driven reset successfully boosts growth and margins.

Institutional Flows: A Hint of Profit‑Taking

One fresh data point: Intact Investment Management recently disclosed that it cut its PepsiCo stake by 28.3%, selling 39,300 shares and retaining about 99,700 shares (roughly $13 million worth at the time of the filing). ^[47]

The same report reiterates that:

PepsiCo’s Q3 EPS beat by a few cents
The company’s annualized dividend of $5.69 equates to a yield near 3.9%
The payout ratio is just over 108% on a trailing earnings basis ^[48]

While a single fund’s move isn’t decisive, it’s consistent with a broader picture where:

Some investors are re‑balancing after a long stretch of PepsiCo being a “go‑to” defensive name
Others may be rotating within consumer staples, favoring companies with cleaner balance sheets or higher growth

Key Risks to the PepsiCo Investment Case

From today’s news and analysis, several risks stand out:

Execution risk on the Elliott plan
- Cutting roughly 20% of product lines and closing plants could hurt near‑term volumes and brand equity if not managed carefully. ^[49]
- Savings might arrive later than expected, or be offset by the need to reinvest heavily in marketing and innovation.
Dividend sustainability and leverage
- With a payout ratio above 100% on trailing earnings and net debt around the mid‑$40 billion range, PepsiCo has less flexibility than it did a decade ago. ^[50]
- Any earnings disappointment could reignite calls for a slower dividend growth rate or a “diet” for the payout, as some analysts phrase it.
Competitive pressure from Coca‑Cola and private label
- KO currently enjoys higher margins and better recent growth, giving it more room to maneuver on pricing and innovation. ^[51]
- As consumers trade down, private‑label snacks and beverages can chip away at volumes.
Macro and regulatory backdrop
- A weaker consumer, new sugar taxes, or regulatory pushes around nutrition could weigh on both volumes and mix in key categories.

So Is PepsiCo Stock a Buy, Sell or Hold After Today’s News?

From the mix of current headlines, forecasts and analyses dated around December 10, 2025, a nuanced picture emerges:

Bullish arguments
- A credible activist (Elliott) has forced a serious look at cost structure and portfolio complexity, which could unlock value over time if executed well. ^[52]
- JPMorgan’s upgrade and other recent commentary highlight new products, stronger marketing and productivity savings as tangible drivers of high‑single‑digit returns in 2026. ^[53]
- A near‑4% dividend yield from an established Dividend King, combined with a forward P/E in the high teens, is appealing to many income‑oriented, risk‑averse investors. ^[54]
Cautious or bearish arguments
- Recent performance vs. Coca‑Cola and the broader market has been underwhelming, and the valuation is not obviously cheap on trailing metrics. ^[55]
- The dividend debate—with some analysts openly warning of long‑term cut risk if “something big” doesn’t change—adds a layer of uncertainty for investors who treat PepsiCo as a rock‑solid income anchor. ^[56]
- The SKU cuts, plant closures and potential layoffs could weigh on morale and short‑term sales, even if they ultimately improve profitability. ^[57]

Given all of this, the consensus stance—a blend of “Hold” and “Moderate Buy” ratings with price targets clustered around $158–160—makes sense: upside is there, but execution and balance‑sheet discipline now matter more than ever. ^[58]

For different types of investors, that may translate roughly as:

Income‑focused, long‑term investors may still view PepsiCo as a core defensive holding, but should monitor free cash flow, debt trends and dividend coverage more closely than in the past.
Total‑return investors might wait to see evidence that the Elliott plan is driving better volume trends and margin expansion before adding aggressively.
Value‑oriented investors focused on deep discounts might see PEP as fairly valued, rather than a screaming bargain, at today’s levels.

Whatever your strategy, today’s combination of activist restructuring, big‑bank upgrades and dividend debate makes PepsiCo a stock to watch closely through 2026.

References

PepsiCo (PEP) Stock Today: Elliott Deal, JPMorgan Upgrade and Dividend Jitters – What It All Means for 2026