Deutsche Bank downgraded PepsiCo to Hold from Buy on Monday and lowered its price target to $138 from $155, citing reduced confidence in the company's North American recovery. Analyst Steve Powers said many of PepsiCo's turnaround efforts in North America, including lower prices, new products, more shelf space, brand refreshes and cost savings, have produced mixed or short-lived benefits, and that both the food and beverage units there are still struggling to improve sales, market share and profitability on a lasting basis. Powers noted some problems date back to the pandemic, when PepsiCo raised snack prices too much and spent heavily on capacity and staff when growth expectations were higher, leaving the company caught between a cost structure built for higher growth and a structurally softer consumer environment. Deutsche Bank trimmed its 2026 EPS estimate to $8.55 from $8.58, in line with consensus, and cut its 2027 estimate to $8.61 from $8.88, below the consensus of $8.97. Powers said the bank does not envision a clear path to the improvement embedded in consensus given soft demand, higher costs, renewed needs for higher pricing, continued reinvestment, limited evidence of durable North American traction and growing risks to overseas momentum.
PepsiCo IncDeutsche Bank downgraded PepsiCo to Hold and cut its price target to $138 from $155 on reduced confidence in the North American recovery.
Deutsche Bank Aktiengesellschaft