Freedom Capital Markets Adjusts PepsiCo Rating to Hold and Reduces Price Target to $164
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 23 2025
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Should l Buy PEP?
Source: Benzinga
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Analyst Views on PEP
Wall Street analysts forecast PEP stock price to rise
12 Analyst Rating
6 Buy
6 Hold
0 Sell
Moderate Buy
Current: 154.620
Low
144.00
Averages
161.90
High
172.00
Current: 154.620
Low
144.00
Averages
161.90
High
172.00
About PEP
PepsiCo, Inc. is a global beverage and convenient food company. The Company’s segments include PepsiCo Foods North America (PFNA), PepsiCo Beverages North America (PBNA), International Beverages Franchise (IB Franchise), Europe, Middle East and Africa (EMEA), Latin America Foods (LatAm Foods), and Asia Pacific Foods. PFNA segment includes all of its convenient food businesses in the United States and Canada. PBNA segment includes all of its beverage businesses in the United States and Canada. IB Franchise segment includes its international franchise beverage businesses, as well as its SodaStream business. EMEA segment includes its convenient food businesses and beverage businesses with Company-owned bottlers in Europe, the Middle East and Africa. LatAm Foods segment includes all of its convenient food businesses in Latin America. Asia Pacific Foods segment consists of its convenient food businesses in Asia Pacific, including China, Australia and New Zealand, as well as India.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Celsius Holdings Faces Sales Slowdown Pressure
- Sales Momentum Weakening: Morgan Stanley analyst Eric Serotta lowered Celsius Holdings' price target to $55 from $64 while maintaining an ‘Overweight’ rating, expressing concerns over slowing sales momentum from the Alani brand, which could impact future revenue growth.
- Price Target Adjustments: JP Morgan raised Celsius' price target by 4.7% to $70, while Roth Capital cut its target to $65, indicating a divergence in market sentiment regarding Celsius' future profitability, potentially shaking investor confidence.
- Revenue Growth Reliant on Acquisitions: Celsius reported a record quarterly revenue of $782.6 million for Q1 2026, representing a 138% year-over-year increase; however, most of this growth stemmed from the acquisitions of Alani Nu and Rockstar, with core Celsius sales only growing by 6%, raising sustainability concerns among investors.
- Declining Gross Margins: Celsius reported a consolidated gross margin of 48.3%, approximately 400 basis points lower than the same quarter last year, primarily due to the lower margin profiles of Alani Nu and Rockstar, indicating challenges in maintaining profitability.
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Three Dividend Stocks Worth Considering for Your Portfolio
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- High Yield from PepsiCo: PepsiCo achieved an 8.5% net revenue growth and a 27% increase in earnings per share in Q1 2026, with a payout ratio of 89.3%, yet its 4.1% dividend yield surpasses Coca-Cola, showcasing its competitive edge in the beverage market.
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High-Yield Stock Recommendations: Vici, Pepsi, T. Rowe
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- Pepsi's Financial Strength: Pepsi's net revenue grew by 8.5% year-over-year in Q1 2026, with earnings per share (EPS) soaring 27% and net profit margin rising from 8.83% to 9.21%, despite a higher debt load, its 4.1% dividend yield remains attractive compared to Coca-Cola, highlighting its appeal among blue-chip stocks.
- T. Rowe Price's Steady Growth: T. Rowe Price has been providing financial services since 1937, with Q1 2026 revenue increasing 5.3% to $1.85 billion and a dividend yield of 4.9%, while its low payout ratio of 54.77% positions it well to achieve Dividend King status by 2037, reflecting solid financial health.
- Portfolio Construction Advice: By combining Vici Properties, Pepsi, and T. Rowe Price, investors can create a robust high-yield stock portfolio; although Vici Properties was not included in Motley Fool's top ten recommended stocks, its long-term growth potential remains noteworthy.
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Dividend Growth Potential in Consumer Goods Companies
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- PepsiCo's Sustained Growth: PepsiCo reported a 2.6% organic revenue growth in Q1, with core earnings per share up 5%, and increased its dividend for the 54th consecutive year to an annualized $5.69, yielding 3.7%; although its payout ratio is high, future dividend growth potential remains promising as earnings increase.
- Starbucks' Transformation Progress: Under the leadership of former Chipotle CEO Brian Niccol, Starbucks is undergoing a turnaround, with Q1 adjusted earnings per share surging 22% year-over-year and global comparable store sales rising 6%; despite a payout ratio of 187%, future earnings growth is expected to support dividend sustainability.
- Market Opportunities and Investments: Home Depot's acquisitions, including SRS Distribution, expanded its market opportunity by $100 billion, while PepsiCo and Starbucks are actively optimizing operations and leveraging technologies like AI to enhance profitability, laying the groundwork for future dividend growth and share price appreciation.
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Dividend Performance of Home Depot, PepsiCo, and Starbucks
- Home Depot's Dividend Stability: Home Depot has paid dividends for 39 consecutive years, currently offering a 2.9% yield, and despite a challenging housing market, its comparable sales increased by 0.3% in 2025, demonstrating business resilience.
- PepsiCo's Growth Potential: PepsiCo has increased its dividend for 54 consecutive years, with an annualized dividend of $5.69 and a yield of 3.7%, while organic revenue grew 2.6% year-over-year in Q1, showcasing its adaptability in a high-inflation environment.
- Starbucks' Recovery Progress: Under former CEO Niccol, Starbucks is undergoing a turnaround, recently paying its 64th consecutive dividend with a yield of 2.4%, and although its payout ratio is high at 187%, future earnings are expected to support dividend growth.
- Investor Opportunities: Currently, Home Depot, PepsiCo, and Starbucks all offer above-average dividend yields, attracting income-focused investors, particularly as strong performance in the consumer goods sector lays the groundwork for future dividend increases.
See More
Top Three High-Yield Stocks to Buy
- Home Depot's Resilience: Despite facing high interest rates and a weak housing market, Home Depot achieved a 0.3% increase in comparable sales in 2025 and paid its 156th consecutive quarterly dividend in March, totaling $9.32 per share annually, with a forward yield of 2.9%, significantly above the S&P 500 average.
- PepsiCo's Steady Growth: PepsiCo reported a 2.6% organic revenue growth in Q1, with core earnings per share up 5% on a constant-currency basis, and increased its dividend for the 54th consecutive year, currently at $5.69 annually, yielding 3.7%, indicating potential for future dividend sustainability despite a high payout ratio.
- Starbucks' Turnaround Strategy: Under the leadership of former Chipotle CEO Brian Niccol, Starbucks is undergoing a strategic transformation, with Q1 adjusted earnings per share surging 22% year-over-year and global comparable store sales increasing by 6%, despite a high payout ratio of 187%, future earnings growth is expected to support dividend increases.
- Attractive Investment Opportunities: All three companies demonstrate strong market positions and profitability, with Home Depot's market opportunity estimated at $700 billion, PepsiCo generating $95 billion in annual revenue from its brand portfolio, and Starbucks' recovery strategy potentially positioning it as an undervalued dividend stock, appealing to income-focused investors.
See More
Celsius Holdings Faces Sales Slowdown Pressure
- Sales Momentum Weakening: Morgan Stanley analyst Eric Serotta lowered Celsius Holdings' price target to $55 from $64 while maintaining an ‘Overweight’ rating, expressing concerns over slowing sales momentum from the Alani brand, which could impact future revenue growth.
- Price Target Adjustments: JP Morgan raised Celsius' price target by 4.7% to $70, while Roth Capital cut its target to $65, indicating a divergence in market sentiment regarding Celsius' future profitability, potentially shaking investor confidence.
- Revenue Growth Reliant on Acquisitions: Celsius reported a record quarterly revenue of $782.6 million for Q1 2026, representing a 138% year-over-year increase; however, most of this growth stemmed from the acquisitions of Alani Nu and Rockstar, with core Celsius sales only growing by 6%, raising sustainability concerns among investors.
- Declining Gross Margins: Celsius reported a consolidated gross margin of 48.3%, approximately 400 basis points lower than the same quarter last year, primarily due to the lower margin profiles of Alani Nu and Rockstar, indicating challenges in maintaining profitability.
See More
Three Dividend Stocks Worth Considering for Your Portfolio
- Strong Performance of Vici Properties: Vici Properties reported a 3.5% revenue increase to $1 billion in Q1 2026, supported by a 100% occupancy rate, demonstrating stability in the casino REIT sector and likely to continue attracting investor interest.
- High Yield from PepsiCo: PepsiCo achieved an 8.5% net revenue growth and a 27% increase in earnings per share in Q1 2026, with a payout ratio of 89.3%, yet its 4.1% dividend yield surpasses Coca-Cola, showcasing its competitive edge in the beverage market.
- Robust Growth of T. Rowe Price: T. Rowe Price's revenue grew by 5.3% to $1.85 billion in Q1 2026, maintaining a net profit margin of 29.53%, and with a 4.9% dividend yield and a low payout ratio of 54.77%, it stands as an ideal long-term investment choice.
- Investment Portfolio Potential: Combining Vici Properties, PepsiCo, and T. Rowe Price creates a solid dividend investment portfolio that offers investors stable cash flow and long-term growth potential.
See More
High-Yield Stock Recommendations: Vici, Pepsi, T. Rowe
- Vici Properties Performance: Vici Properties, owning 61 casinos, reported a 3.5% revenue increase to $1 billion in Q1 2026, with a 5.7% growth in adjusted funds from operations (AFFO), and pays out 90% of its income as dividends at a yield of 6.19%, showcasing its strong position in the high-yield REIT sector.
- Pepsi's Financial Strength: Pepsi's net revenue grew by 8.5% year-over-year in Q1 2026, with earnings per share (EPS) soaring 27% and net profit margin rising from 8.83% to 9.21%, despite a higher debt load, its 4.1% dividend yield remains attractive compared to Coca-Cola, highlighting its appeal among blue-chip stocks.
- T. Rowe Price's Steady Growth: T. Rowe Price has been providing financial services since 1937, with Q1 2026 revenue increasing 5.3% to $1.85 billion and a dividend yield of 4.9%, while its low payout ratio of 54.77% positions it well to achieve Dividend King status by 2037, reflecting solid financial health.
- Portfolio Construction Advice: By combining Vici Properties, Pepsi, and T. Rowe Price, investors can create a robust high-yield stock portfolio; although Vici Properties was not included in Motley Fool's top ten recommended stocks, its long-term growth potential remains noteworthy.
See More
Dividend Growth Potential in Consumer Goods Companies
- Home Depot's Resilience: Despite facing high interest rates and a weak housing market, Home Depot achieved a 0.3% increase in same-store sales in 2025 and paid its 156th consecutive quarterly dividend in March, totaling $9.32 per share annually, with a forward yield of 2.9%, demonstrating strong profitability and dividend-paying capacity.
- PepsiCo's Sustained Growth: PepsiCo reported a 2.6% organic revenue growth in Q1, with core earnings per share up 5%, and increased its dividend for the 54th consecutive year to an annualized $5.69, yielding 3.7%; although its payout ratio is high, future dividend growth potential remains promising as earnings increase.
- Starbucks' Transformation Progress: Under the leadership of former Chipotle CEO Brian Niccol, Starbucks is undergoing a turnaround, with Q1 adjusted earnings per share surging 22% year-over-year and global comparable store sales rising 6%; despite a payout ratio of 187%, future earnings growth is expected to support dividend sustainability.
- Market Opportunities and Investments: Home Depot's acquisitions, including SRS Distribution, expanded its market opportunity by $100 billion, while PepsiCo and Starbucks are actively optimizing operations and leveraging technologies like AI to enhance profitability, laying the groundwork for future dividend growth and share price appreciation.
See More
Dividend Performance of Home Depot, PepsiCo, and Starbucks
- Home Depot's Dividend Stability: Home Depot has paid dividends for 39 consecutive years, currently offering a 2.9% yield, and despite a challenging housing market, its comparable sales increased by 0.3% in 2025, demonstrating business resilience.
- PepsiCo's Growth Potential: PepsiCo has increased its dividend for 54 consecutive years, with an annualized dividend of $5.69 and a yield of 3.7%, while organic revenue grew 2.6% year-over-year in Q1, showcasing its adaptability in a high-inflation environment.
- Starbucks' Recovery Progress: Under former CEO Niccol, Starbucks is undergoing a turnaround, recently paying its 64th consecutive dividend with a yield of 2.4%, and although its payout ratio is high at 187%, future earnings are expected to support dividend growth.
- Investor Opportunities: Currently, Home Depot, PepsiCo, and Starbucks all offer above-average dividend yields, attracting income-focused investors, particularly as strong performance in the consumer goods sector lays the groundwork for future dividend increases.
See More
Top Three High-Yield Stocks to Buy
- Home Depot's Resilience: Despite facing high interest rates and a weak housing market, Home Depot achieved a 0.3% increase in comparable sales in 2025 and paid its 156th consecutive quarterly dividend in March, totaling $9.32 per share annually, with a forward yield of 2.9%, significantly above the S&P 500 average.
- PepsiCo's Steady Growth: PepsiCo reported a 2.6% organic revenue growth in Q1, with core earnings per share up 5% on a constant-currency basis, and increased its dividend for the 54th consecutive year, currently at $5.69 annually, yielding 3.7%, indicating potential for future dividend sustainability despite a high payout ratio.
- Starbucks' Turnaround Strategy: Under the leadership of former Chipotle CEO Brian Niccol, Starbucks is undergoing a strategic transformation, with Q1 adjusted earnings per share surging 22% year-over-year and global comparable store sales increasing by 6%, despite a high payout ratio of 187%, future earnings growth is expected to support dividend increases.
- Attractive Investment Opportunities: All three companies demonstrate strong market positions and profitability, with Home Depot's market opportunity estimated at $700 billion, PepsiCo generating $95 billion in annual revenue from its brand portfolio, and Starbucks' recovery strategy potentially positioning it as an undervalued dividend stock, appealing to income-focused investors.
See More
