PepsiCo, Inc. (NASDAQ: PEP) stock traded lower on Tuesday, December 23, 2025, as investors continued to weigh the company’s newly detailed North America turnaround playbook—built around sharper “everyday value,” portfolio simplification, and aggressive productivity—against near-term execution risk in a still-price-sensitive consumer environment.
As of early afternoon in the U.S. (about 1:50 p.m. ET), PepsiCo shares were at $144.24, down $2.81 (-1.91%) on the day, after opening near $147.05 and moving between $143.66 and $147.50.
The intraday move comes amid a December news cycle that has been unusually dense for a consumer staples stalwart: a high-profile engagement with activist investor Elliott Investment Management, a preliminary 2026 financial outlook that outlines the company’s expected path back to faster growth, and leadership shifts aimed at accelerating integration in North America. [1]
What’s moving PepsiCo stock right now
PepsiCo’s most market-relevant story in late 2025 is not a single earnings headline—it’s a strategy reset (or, in PepsiCo’s words, a set of “priorities”) that attempts to solve a difficult problem facing packaged food and beverage giants: how to protect margins and brand equity while bringing price/value back into focus after years of inflation-driven pricing.
In early December, PepsiCo announced a suite of actions designed to improve performance—especially at PepsiCo Foods North America—and paired it with a preliminary 2026 outlook that sets clearer targets for organic growth, earnings expansion, and free cash flow conversion. [2]
Those plans followed “constructive engagement” with Elliott, the activist that disclosed a large stake earlier in 2025 and pushed for changes to boost performance and competitiveness. [3]
PepsiCo’s 2026 forecast: the numbers investors are focused on
PepsiCo’s preliminary outlook is now functioning as a reference point for how Wall Street frames the “PEP stock forecast” debate heading into 2026—particularly whether PepsiCo can re-accelerate demand without sacrificing profitability.
Key items from the company’s December outlook include:
- 2026 organic revenue growth:2% to 4%, with PepsiCo expecting to deliver the high end of that range in the second half of 2026. [4]
- 2026 reported net revenue growth: implied 4% to 6%, factoring in an expected contribution from acquisitions/divestitures and foreign exchange translation. [5]
- Core EPS growth:approximately 5% to 7% in 2026 (and ~7% to 9% excluding the impact of global minimum tax regulations, per PepsiCo’s statement). [6]
- Operating margin path: PepsiCo says it expects at least 100 basis points of core operating margin expansion in aggregate over the next three fiscal years, supported by “record” productivity savings. [7]
- Free cash flow conversion: PepsiCo expects at least 80% in 2026 (including a final ~$1 billion tax payment tied to the Tax Cuts and Jobs Act of 2017) and at least 90% in 2027. [8]
- Capital allocation posture: capital spending expected below 5% of net revenue in 2026, continued dividend increases (subject to board approval), and a balanced approach across portfolio actions and share repurchases. [9]
For investors, the headline is straightforward: PepsiCo is signaling faster growth and better margins in 2026—but that outcome depends heavily on execution in North America and the success of value-focused initiatives to rebuild purchase frequency.
The “how”: price/value, SKU cuts, and a push into “functional” innovation
The mechanics of PepsiCo’s plan matter because they translate directly into what consumers and retailers will see: pricing architecture, product assortment, and in-store presence.
PepsiCo has highlighted actions including:
- Targeted affordability and price tiers by brand/channel to stimulate purchase frequency for mainstream brands. [10]
- Portfolio simplification: PepsiCo says it is reducing nearly 20% of SKUs in the U.S. by early next year. [11]
- Cost takeout and manufacturing actions: PepsiCo said it has closed three manufacturing plants and shut several manufacturing lines during 2025 as part of the efficiency push. [12]
- Innovation emphasis on “simpler” and “functional” products, including launches such as Simply NKD Cheetos and Doritos and a planned 2026 launch of Doritos Protein, among other initiatives. [13]
The Associated Press separately reported that, as part of the Elliott-related deal context, PepsiCo plans to cut prices and eliminate about 20% of product offerings by early next year, though the company did not disclose which products or the exact size of price reductions. [14]
This is the heart of the near-term investment question for PepsiCo stock: whether “value” and “simplification” can restore volume momentum quickly enough to justify optimism without triggering a margin giveback that overwhelms productivity savings.
Supply chain review: a longer-dated catalyst for PepsiCo shares
Beyond pricing and product decisions, PepsiCo is also evaluating a potentially significant supply chain and go-to-market redesign in North America—an area Elliott had spotlighted in its campaign.
Reuters reported PepsiCo announced a review of its North America supply chain and emphasized a cost-reduction push after weeks of discussions with Elliott. [15]
PepsiCo has also described an integrated model evaluation and said it intends to provide a comprehensive update on North America supply chain and go-to-market optimization initiatives in late 2026—meaning this element of the “turnaround story” may unfold more gradually than the SKU and affordability moves expected in early 2026. [16]
Analyst forecasts and price targets: upgrades, holds, and a wide range of outcomes
The December strategy update has triggered a fresh wave of analyst actions—useful for understanding what Wall Street thinks is “priced in” to PEP shares and what’s considered upside.
Notable recent moves cited in widely distributed analyst-note reporting include:
- JPMorgan upgraded PepsiCo to Overweight from Neutral with a $164 price target, pointing to an “accelerated agenda” and productivity/innovation drivers. [17]
- Citi raised its PepsiCo price target to $170 while maintaining a Buy rating, in the context of broader 2026 outlook adjustments across the sector. [18]
- Barclays raised its price target to $144 and kept an Equal Weight stance, describing PepsiCo’s 2026 outlook as largely in line with Street expectations. [19]
- Jefferies lifted its target modestly to $164 and maintained a Hold rating (per widely syndicated coverage). [20]
For investors looking for a quick “consensus snapshot,” MarketWatch’s analyst summary (as shown in its December listing for PepsiCo) indicates an average price target around $157.63 with the average recommendation described as “Overweight.” [21]
The takeaway: analysts generally recognize PepsiCo’s brand strength and shareholder-return profile, but the “PEP stock forecast” is still split between those who see a valuation opportunity (if execution improves) and those who prefer to wait for proof that volumes and North America margins are turning sustainably.
Dividend focus: why income investors still circle PepsiCo stock
While the Elliott story and the 2026 plan dominate headlines, PepsiCo’s dividend remains a key pillar of the investment case—especially with the stock trading below many analysts’ targets and with U.S. investors continuing to seek dependable income in uncertain cycles.
PepsiCo’s board declared a quarterly dividend of $1.4225 per share, described as a 5% increase versus the comparable year-earlier period. The dividend is payable January 6, 2026 to shareholders of record as of December 5, 2025. [22]
The company also stated it has paid consecutive quarterly cash dividends since 1965, and 2025 marked its 53rd consecutive annual dividend increase. [23]
At the current share price near the mid-$140s, PepsiCo’s annualized dividend rate of $5.69 implies a yield hovering around 4% (with the usual caveat that yield fluctuates with price). [24]
It’s a point echoed in “dividend-stock” coverage circulating on December 23, including a Nasdaq commentary piece that frames PepsiCo as a top-tier dividend name among large U.S. companies. [25]
Leadership changes: a North America integration push starts Dec. 28
Investors evaluating PepsiCo’s turnaround narrative are also watching whether management and structure match the urgency implied by the new plan.
On December 15, PepsiCo announced organizational changes effective December 28, 2025, including:
- Steven Williams moving from CEO of PepsiCo North America to Executive Vice President and Vice Chairman, Global Chief Commercial Officer and Corporate Affairs. [26]
- Ram Krishnan becoming CEO, PepsiCo North America, with a mandate to accelerate integration of Foods and Beverages operations where it creates value. [27]
The leadership reshuffle matters for PepsiCo stock because the company’s most explicit growth-and-margin “fix” is centered on North America—precisely where execution complexity is highest (retail dynamics, assortment rationalization, route-to-market changes, and a more competitive value environment).
PepsiCo’s portfolio strategy: Poppi, Siete, and the “functional” growth lane
While the 2026 affordability and productivity plan is the immediate catalyst, PepsiCo’s broader growth strategy includes targeted acquisitions that reposition the portfolio toward faster-growing consumer preferences.
A useful example is PepsiCo’s move into functional soda:
- PepsiCo announced in March 2025 it agreed to acquire poppi for $1.95 billion, including anticipated cash tax benefits (net purchase price cited at $1.65 billion), with a potential earnout tied to performance milestones. [28]
- PepsiCo later announced it closed the poppi acquisition on May 19, 2025, reiterating the same purchase price framework and positioning the deal as part of its portfolio transformation. [29]
In its September 2025 quarterly filing, PepsiCo also described acquiring Siete (Mexican-American foods) in January 2025 for $1.2 billion and confirmed the poppi acquisition details and related accounting items. [30]
On December 23, Food Dive’s year-end M&A roundup again highlighted PepsiCo’s poppi acquisition as one of the notable food-and-beverage deals of 2025—an indication that the market continues to view functional beverages as a strategic battleground for legacy soda players. [31]
The bigger idea for PEP shareholders: PepsiCo isn’t relying solely on cost cuts. It’s also trying to widen its addressable market—especially among younger and wellness-oriented consumers—through acquisitions and product reformulation/innovation, while simultaneously repairing “value perception” in core snacks and beverages.
Risks to watch: why investors remain cautious even with a 2026 uplift plan
Even for a defensive consumer staples name, PepsiCo’s plan carries real risks that show up quickly in quarterly results:
- Price cuts vs. margin protection: If the “sharper everyday value” strategy requires more promotional intensity than planned, PepsiCo could face near-term margin pressure even with productivity gains. [32]
- SKU rationalization execution: Cutting ~20% of SKUs can streamline operations, but it can also create shelf disruption, customer friction, and unexpected demand shifts—especially if retailers or consumers feel favorite variants disappear. [33]
- Complexity of route-to-market changes: PepsiCo’s own timeline suggests the supply chain/go-to-market work is multi-year, with a fuller update not expected until late 2026. That can test investor patience if early results are mixed. [34]
- Regulatory and tax variables: PepsiCo flagged global minimum tax regulations as a factor affecting its 2026 EPS framing. [35]
These aren’t abstract concerns; they help explain why some analysts remain neutral even as others upgrade the name.
What to watch next for PepsiCo stock
For investors tracking PepsiCo stock into early 2026, several milestones stand out:
- Earnings date: PepsiCo said it plans to issue its fourth-quarter and full-year 2025 results on February 3, 2026, with materials posted in the early morning. [36]
- Early 2026 commercial signals: Watch for evidence that affordability initiatives are increasing purchase frequency and that shelf presence is improving, consistent with PepsiCo’s expectation of increased in-store points of presence in the first half of 2026. [37]
- Ongoing analyst revisions: With multiple banks updating targets in December, additional 2026 estimate changes could be a catalyst—especially if PepsiCo provides more granular detail on pricing, product cuts, and reinvestment levels. [38]
- Dividend cadence: The next dividend payment date and any forward commentary on buybacks will matter for total return expectations, particularly with PepsiCo explicitly calling for increased cash returns to shareholders in 2026 and 2027 (subject to board approval). [39]
Bottom line: PepsiCo stock is trading the “proof of execution” phase
On December 23, 2025, PepsiCo stock is less about whether the company has a plan—and more about whether investors believe that plan can deliver measurable improvements in North American competitiveness fast enough to change the stock’s trajectory.
PepsiCo is leaning into a clear set of levers: affordability architecture, SKU simplification, operational cost takeout, and “functional” innovation across snacks and beverages, supported by a preliminary 2026 outlook that calls for faster growth and rising profitability. [40]
With the dividend story intact and analysts split between upgrades and cautious holds, PEP now looks set to trade on execution milestones—starting with early 2026 signals and culminating in the February earnings report that could validate (or challenge) the company’s confidence heading into the new fiscal year. [41]
References
1. www.pepsico.com, 2. www.pepsico.com, 3. www.reuters.com, 4. www.pepsico.com, 5. www.pepsico.com, 6. www.pepsico.com, 7. www.pepsico.com, 8. www.pepsico.com, 9. www.pepsico.com, 10. www.pepsico.com, 11. www.pepsico.com, 12. www.pepsico.com, 13. www.pepsico.com, 14. apnews.com, 15. www.reuters.com, 16. www.pepsico.com, 17. www.tipranks.com, 18. www.tipranks.com, 19. www.tipranks.com, 20. www.tipranks.com, 21. www.gurufocus.com, 22. www.pepsico.com, 23. www.pepsico.com, 24. www.pepsico.com, 25. www.nasdaq.com, 26. www.pepsico.com, 27. www.pepsico.com, 28. www.pepsico.com, 29. www.pepsico.com, 30. www.sec.gov, 31. www.fooddive.com, 32. www.pepsico.com, 33. www.pepsico.com, 34. www.pepsico.com, 35. www.pepsico.com, 36. www.pepsico.com, 37. www.pepsico.com, 38. www.tipranks.com, 39. www.pepsico.com, 40. www.pepsico.com, 41. www.pepsico.com
