PepsiCo, Inc. (NASDAQ: PEP) just had one of its most eventful trading days of 2025. Between a fresh upgrade from JPMorgan, a high‑profile agreement with activist investor Elliott Investment Management, and a sweeping 2026 turnaround plan, the stock is suddenly back in the spotlight.
Here’s a detailed look at what happened after the bell on December 10, 2025, and what investors should have on their radar before the market opens on December 11, 2025.
PepsiCo Stock After the Bell on December 10, 2025
Big move in the regular session
On Wednesday, December 10, 2025, PepsiCo shares rallied hard:
- Close: $149.70
- Change: +3.5% on the day, up from $144.64 the prior close
- Intraday range: roughly $147.00 to $149.78
- Volume: about 18.4 million shares, roughly double the previous day’s turnover [1]
That kind of move and volume in a mega‑cap consumer staples stock is a strong signal that institutions were actively repositioning around the new strategic story.
After-hours: momentum but no shock
In after-hours trading on December 10, PEP barely budged, ticking slightly higher to around $149.79, a move of roughly +0.1% versus the regular close. [2]
In other words, most of the price discovery already happened during Wednesday’s session. There was no late‑night guidance change, surprise filing, or new headline that meaningfully shifted the story after 4:00 p.m. Eastern.
That means Thursday’s open (December 11) is mostly about how the market digests what we already know—rather than bracing for a fresh bombshell.
The Big Story: Elliott Deal and PepsiCo’s 2026 Turnaround Plan
The rally on December 10 doesn’t exist in a vacuum. It’s the market catching up to a strategic reset that PepsiCo formally laid out earlier in the week after reaching an agreement with activist investor Elliott Investment Management, which built a roughly $4 billion stake in the company. [3]
What PepsiCo just promised
In a December 8 press release, PepsiCo announced a package of commercial and financial priorities aimed at “enhancing shareholder value” and provided a preliminary 2026 outlook. Key pieces include: [4]
- Cutting complexity and SKUs
- Reduce nearly 20% of U.S. SKUs (individual product variants) by early 2026.
- Close three manufacturing plants and several production lines to streamline operations.
- Lower prices and “sharper everyday value”
- More aggressive affordable price tiers to boost purchase frequency of mainstream brands like Lay’s and Doritos.
- Publicly committing to price cuts or better value on key snack and beverage lines.
- Re‑focused product strategy
- Faster innovation in “permissible and functional” products, including:
- Simply NKD Cheetos and Doritos (no artificial colors or flavors)
- A protein‑fortified Doritos line launching in 2026
- New offerings with more protein, fiber and whole grains, plus a prebiotic Pepsi variant [5]
- Faster innovation in “permissible and functional” products, including:
- Supply chain and go‑to‑market review
- A full review of the North America supply chain and go‑to‑market model, including whether its integrated bottling structure is still optimal.
- PepsiCo expects to give a detailed update by late 2026. [6]
- Cost cuts and margin expansion
- Targeting record productivity savings in 2026, aided by automation and digitalization.
- Aiming for at least 100 basis points of core operating margin expansion over the next three fiscal years. [7]
The numbers behind the plan
PepsiCo also put some concrete numbers around its outlook:
- 2025 guidance
- Low single‑digit organic revenue growth
- Core EPS roughly flat versus 2024 (around a 0.5% decline including FX headwinds) [8]
- 2026 preliminary outlook
- Organic revenue growth:2–4%
- Including FX and acquisitions, reported net revenue growth:4–6%
- Core EPS growth:5–7%, or roughly 7–9% excluding global minimum tax impacts
- Free cash flow conversion: at least 80% in 2026 and 90% in 2027
- Ongoing dividend growth and higher total cash returns to shareholders in 2026–27 [9]
From Elliott’s perspective, this is the company committing in public to do what an activist would normally demand: cut fat, simplify the portfolio, lower prices where necessary, and use the savings to fund innovation and marketing.
JPMorgan Upgrade: “Chips That Are Too Cheap to Ignore”
The immediate catalyst for Wednesday’s move was JPMorgan Chase & Co. upgrading PepsiCo from Neutral to Overweight and boosting its price target from $151 to $164. [10]
Why JPMorgan turned bullish
Analyst Andrea Faria Teixeira at JPMorgan highlighted several points in favor of PEP: [11]
- PepsiCo now has an “accelerated agenda of innovation and marketing” funded by aggressive productivity savings.
- The bank expects high single‑digit total shareholder returns (TSR) by 2026, supported by mid‑ to high‑single‑digit EPS growth.
- Despite being a high‑quality staple name, PEP trades at what JPMorgan calls a “steep high‑teens discount” to comparable blue‑chip peers.
- Margin expansion of roughly 50 bps in 2026 looks achievable thanks to cost cuts and foreign exchange flipping from a headwind in 2025 to a tailwind in 2026. [12]
JPMorgan’s note explicitly ties the upgrade to the new Elliott‑backed plan and the 2026 outlook, framing the stock as a quality defensive name with a clearer growth and margin story.
Market reaction in pre‑market and regular hours
Before Wednesday’s regular session even began, PEP was already reacting:
- Around the pre‑market window on December 10, PEP traded near $146–148, up roughly 1–2% versus the prior close, according to Reuters and pre‑market trade data. [13]
- By the close, the stock was up 3.5% on the day at $149.70, with elevated volume of over 18 million shares. [14]
MarketBeat’s news feed summarized the move succinctly: shares were higher as investors digested a flurry of analyst upgrades and the formal agreement with Elliott. [15]
Other firms have also tweaked their views:
- Piper Sandler – Overweight, price target lifted to $172
- UBS – Buy rating, $172 target
- Jefferies – Hold, price target nudged to $164 [16]
So while JPMorgan may have supplied the spark, the broader Street is now calibrating expectations around a more aggressive PepsiCo.
What Other Analysts and Models Are Saying About PEP
Consensus: “Hold” with upside
Despite the newfound enthusiasm, the overall Wall Street consensus on PEP remains relatively cautious:
- Rating: “Hold”
- Analyst breakdown: 7 Buys, 14 Holds, 1 Sell
- Average 12‑month price target: around $157.60
- Implied upside from December 10’s close: roughly 5–6% [17]
That’s not the profile of a hated stock, but it’s not a wall‑of‑buys either. Many analysts want to see execution on the 2026 plan before leaning more heavily bullish.
Fundamental valuation: one model screams “cheap”
On December 10, Simply Wall St published a deep‑dive valuation piece that paints a more optimistic picture. [18]
- Their discounted cash flow (DCF) model estimates a fair value of about $246.92 per share, implying PepsiCo is trading at roughly a 41% discount to intrinsic value.
- At the same time, they note PEP trades on a P/E of ~27.7x, above both the broader beverage sector (~17.4x) and a more tailored “fair” P/E ratio of 26.8x in their framework.
Net result: in their view, PepsiCo looks undervalued on long‑term cash flows, but expensive on simple earnings multiples. That tension is exactly what investors are arguing about right now.
Quant and technical views
Other lenses are more mixed:
- A StockInvest.us technical note calls the recent move a short‑term buy signal, pointing to rising volume and a close near the daily high, with near‑term support around $146–147. [19]
- Algorithmic price‑prediction site CoinCodex sees short‑term volatility, with a model forecast that (as of its last update) expected a dip near $144.62 “tomorrow,” then a modest recovery to around $146.52 in a week, and about $156.33 in a year—but a pullback near $130.93 by 2030. [20]
These model‑based forecasts can be useful context, but they rely heavily on back‑tested patterns. They are not guarantees and can already be off versus live prices—especially on news‑driven days like December 10.
Bearish voices: dividend and leverage worries
Not everyone is cheering. A recent Seeking Alpha opinion piece argues that PepsiCo’s net debt has roughly doubled over the past decade to around $44 billion, warning that the dividend could eventually have to grow more slowly as management prioritizes balance‑sheet strength. The author rates the stock a Sell, framing PEP as a great company but a stretched income play at current levels. [21]
That tension—between a strong brand and a leveraged balance sheet—is central to how income investors think about PEP going into 2026.
Dividend, Earnings and Balance Sheet: What’s Under the Hood?
A big part of the PepsiCo story is that it’s not just a snack and soda company; it’s a dividend machine.
Dividend profile
Recent filings and commentary show: [22]
- Quarterly dividend: $1.4225 per share (paid January 6, 2026; ex‑dividend date December 5, 2025)
- Annualized dividend: $5.69 per share
- Dividend yield: roughly 3.9% at recent prices
- Payout ratio: just over 100% (cited around 108%) on recent earnings
- Dividend streak: PepsiCo has raised its dividend for 53 consecutive years, making it a classic Dividend Aristocrat.
That combination—high yield, long streak, and a temporarily high payout ratio—is exactly why the dividend debate is lively. Bulls see the streak as sacrosanct; bears worry that slower EPS growth and higher debt levels could pressure future increases.
Recent earnings snapshot
According to recent 13F‑driven coverage and earnings recaps: [23]
- Q3 2025 EPS: about $2.29, beating consensus by a few cents.
- Q3 revenue: roughly $23.9 billion, up around 2.6–2.7% year‑over‑year.
- Volume growth has been modest, with years of price hikes and shifting consumer preferences weighing on demand in some North American categories.
The new plan—lower prices on some items, more functional products, and more efficient operations—is designed to rebuild volume without sacrificing margins.
Key Things to Watch Before the Market Opens on December 11, 2025
Heading into Thursday’s session, here are the main pillars investors should keep in mind:
1. Can the 3.5% pop hold?
PEP just staged a 3.5% rally on very heavy volume, closing near the intraday high. [24]
- If the stock holds above the mid‑$140s support zone identified by technical analysts, it reinforces the idea that institutions are buying into the new plan.
- A quick reversal back toward the previous close at $144.64 would suggest the move was more of a one‑day short squeeze or “upgrade pop” than a lasting repricing.
2. Follow‑through on analyst sentiment
With JPMorgan now at Overweight and $164, and others like Piper Sandler and UBS targeting $172, watch for: [25]
- Additional upgrades or target hikes as more research desks digest the Elliott deal and 2026 guidance.
- Any skeptical notes (e.g., questioning whether 2–4% organic growth and 100 bps margin expansion are realistic), which could cap the upside in the near term.
3. Newsflow on layoffs, plant closures and product cuts
Investors will be watching for follow‑up:
- Local or trade press around plant closures and job cuts in North America. [26]
- Concrete details on which SKUs are being eliminated and how retailers respond.
- Early signs of consumer reaction to lower prices and reformulated “cleaner” products.
Positive anecdotes here—like faster shelf resets, better in‑store placement, or early volume lifts—would support the bull case.
4. Macro backdrop and rates
PepsiCo is a defensive, rate‑sensitive dividend payer. With markets focused on the Federal Reserve’s next moves and 2026 rate expectations, any sharp move in bond yields or risk sentiment can still move PEP, even if company news is positive. [27]
5. Short‑term trading levels
For traders looking at the open on December 11:
- Near‑term support: around $146–147, based on recent trading ranges and technical commentary. [28]
- Immediate resistance: the $150 area (psychological round number and Wednesday’s high region).
- A decisive break above $150 with strong volume would signal further acceptance of the new narrative; a failure there might signal consolidation.
Bottom Line: What December 10 Means for PEP Shareholders
As of the close on December 10, 2025, PepsiCo looks very different from the sleepy, slow‑growing staple it was perceived to be just a few months ago:
- It has formalized a deal with Elliott and put real numbers around a multi‑year margin and growth plan. [29]
- JPMorgan’s upgrade and new price target have re‑framed PEP as a potential value‑plus‑growth story rather than just a bond proxy with a 3.9% yield. [30]
- The stock has repriced higher, but consensus still sits at a cautious Hold with only mid‑single‑digit upside embedded in the average target. [31]
- Valuation models and opinion pieces are split: some see a deep long‑term undervaluation, others flag leverage and dividend risk.
For investors watching the open on December 11, 2025, the key isn’t just where PEP prints at 9:30 a.m.—it’s whether the market starts treating this new plan as the beginning of a genuine multi‑year turnaround, or just another temporary activist‑driven sugar high.
References
1. stockanalysis.com, 2. public.com, 3. www.reuters.com, 4. www.pepsico.com, 5. www.pepsico.com, 6. www.reuters.com, 7. www.pepsico.com, 8. www.pepsico.com, 9. www.pepsico.com, 10. www.investing.com, 11. www.investing.com, 12. www.tradingview.com, 13. public.com, 14. stockanalysis.com, 15. www.marketbeat.com, 16. www.investing.com, 17. www.marketbeat.com, 18. simplywall.st, 19. stockinvest.us, 20. coincodex.com, 21. seekingalpha.com, 22. www.marketbeat.com, 23. www.marketbeat.com, 24. stockanalysis.com, 25. www.investing.com, 26. www.reuters.com, 27. finviz.com, 28. stockinvest.us, 29. www.reuters.com, 30. www.investing.com, 31. www.marketbeat.com
