Pepsico (PEP) PT Lowered to $183 at JPMorgan

JPMorgan analyst Andrea Teixeira lowered the price target on Pepsico (NASDAQ: PEP) to $183.00 (from $185.00) while maintaining a Neutral rating.

The analyst comments "We are updating our PepsiCo (PEP, Neutral rated) model following 3Q24 earnings results, Q&A conference call, and our follow-up with SVP of IR Ravi Pamnani. Despite a softer-than-expected 3Q24 top-line (OSG +1.3% missed Street by -160 bps and buyside bar of ~+2%) and another 2024 OSG guidance cut (now +LSD% from “approximately” +4% before), PEP shares outperformed on the day (PEP +1.9% vs. staples XLP +0.5%) on what we view as a combination of 1) relief that PEP was able to reaffirm EPS growth guidance (and in a relatively higher-quality way given continued gross margin expansion and ongoing reinvestment in A&M) despite the likely larger than expected cut to OSG; and 2) short covering given unfavorable sentiment into the print. That said, as investors should appreciate by now, there’s no quick/easy fix to lackluster U.S. snacking trends (management admitting that the current state of snacking category is the most prudent assumption) and International growth also faces headwinds that will likely continue and led to deceleration (e.g., Middle East conflict, China softness, Mexico deceleration)."

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