PepsiCo Announces 2026 Financial Outlook, Expects 2-4% Revenue Growth
Written by Emily J. Thompson, Senior Investment Analyst
Source: PRnewswire
Updated: 5 hour ago0mins
- Revenue Growth Outlook: PepsiCo anticipates organic revenue growth of 2% to 4% for 2026, with expectations to reach the high end of this range in the second half of the year, reflecting strong confidence in market demand.
- Cost Reduction Initiatives: The company plans aggressive cost-cutting measures in its North America Foods division, aiming for at least 100 basis points of core operating margin expansion over the next three years, thereby enhancing overall profitability.
- Cash Flow Conversion Ratio: PepsiCo expects a free cash flow conversion ratio of at least 80% in 2026, increasing to 90% in 2027, which will provide higher cash returns to shareholders and bolster investor confidence.
- Supply Chain Optimization: The company is evaluating its North America supply chain and go-to-market strategies, with plans to provide a comprehensive update to analysts and investors by late 2026, aimed at improving market competitiveness and operational efficiency.
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Analyst Views on PEP
Wall Street analysts forecast PEP stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for PEP is 157.92 USD with a low forecast of 142.00 USD and a high forecast of 172.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Analyst Rating
5 Buy
8 Hold
0 Sell
Moderate Buy
Current: 145.020
Low
142.00
Averages
157.92
High
172.00
Current: 145.020
Low
142.00
Averages
157.92
High
172.00
Piper Sandler
Piper Sandler
Overweight
maintain
$162 -> $161
2025-11-21
Reason
Piper Sandler
Piper Sandler
Price Target
$162 -> $161
2025-11-21
maintain
Overweight
Reason
Piper Sandler lowered the firm's price target on PepsiCo (PEP) to $161 from $162 and keeps an Overweight rating on the shares. The firm says it is updating its models and price targets for recently announced GLP-1 news, higher ABV headwinds, as well as tariff relief and other company specific updates. President Trump recently announced deals with Eli Lilly (LLY) and Novo Nordisk (NVO) to cut GLP-1 drug prices for Medicare and Medicaid beneficiaries in 2026 and offer the treatments directly to consumers at a discount on TrumpRX. Faster user uptake growth in the US appears directionally clear, and Piper now estimates about 20% of the U.S. population could be users by 2028.
Freedom Capital
Georgy Vashchenko
Buy
to
Hold
downgrade
$170 -> $164
2025-10-23
Reason
Freedom Capital
Georgy Vashchenko
Price Target
$170 -> $164
2025-10-23
downgrade
Buy
to
Hold
Reason
Freedom Capital analyst Georgy Vashchenko downgraded PepsiCo to Hold from Buy with a price target of $164, down from $170. Q3 sales and EPS came in above consensus estimates, driving a rally in the stock, as the company maintained its full-year guidance for revenue and improved its EPS growth outlook for FY25, the analyst noted. The firm's revised price target implies 7% upside potential, which it says warrants a Hold recommendation.
DZ Bank
Axel Herlinghaus
Hold
to
Buy
upgrade
$167
2025-10-21
Reason
DZ Bank
Axel Herlinghaus
Price Target
$167
2025-10-21
upgrade
Hold
to
Buy
Reason
DZ Bank analyst Axel Herlinghaus upgraded PepsiCo to Buy from Hold with a $167 price target.
Citi
Filippo Falorni
Buy
downgrade
$168 -> $165
2025-09-25
Reason
Citi
Filippo Falorni
Price Target
$168 -> $165
2025-09-25
downgrade
Buy
Reason
Citi analyst Filippo Falorni lowered the firm's price target on PepsiCo to $165 from $168 and keeps a Buy rating on the shares. Citi also opened a "negative 30-day short-term view" on the shares. The firm expects PepsiCo to report "soft" Q3 results on continued weakness in North America and a lower contribution from international markets.
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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
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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.
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