PepsiCo (NASDAQ:PEP) Shares Up 3.7% Following Strong Earnings

Key Points

• PepsiCo beat quarterly expectations: EPS came in at $2.34 versus the $2.29 consensus, while revenue rose 5.6% year over year to $25.27 billion. Shares climbed 3.7% on the results, with trading volume nearly three times the average.
• Growth remains uneven: International operations, pricing and healthier snack categories supported performance, but North American beverage volumes weakened and PepsiCo lowered its full-year core earnings-growth outlook to approximately 1%–2%.
• Shareholder returns remain a key attraction: PepsiCo declared a quarterly dividend of $1.48, equivalent to a 4.6% yield, while analysts maintained a consensus “Hold” rating and an average price target of $150.20.

PepsiCo, Inc. (NASDAQ:PEP - Get Free Report)'s stock price was up 3.7% on Thursday after the company announced better than expected quarterly earnings. The company traded as high as $129.50 and last traded at $128.34. 23,957,152 shares changed hands during mid-day trading, an increase of 197% from the average session volume of 8,078,939 shares. The stock had previously closed at $123.73.

The company reported $2.34 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.29 by $0.05. PepsiCo had a net margin of 10.78% and a return on equity of 54.63%. The company had revenue of $25.27 billion for the quarter, compared to the consensus estimate of $24.95 billion. During the same period last year, the firm posted $2.29 EPS. PepsiCo's revenue for the quarter was up 5.6% on a year-over-year basis.

PepsiCo Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Wednesday, September 30th. Investors of record on Friday, September 4th were given a $1.48 dividend. This represents a $5.92 annualized dividend and a yield of 4.6%. The ex-dividend date was Friday, September 4th. PepsiCo's payout ratio is 77.59%.

Trending Headlines about PepsiCo

Here are the key news stories impacting PepsiCo this week:

• Positive Sentiment: Quarterly results exceeded expectations. Adjusted earnings reached $2.34 per share versus the $2.29 consensus, while revenue rose 5.6% year over year to $25.27 billion, ahead of estimates. Reported operating profit increased 19% to $4.26 billion. PepsiCo earnings top estimates, but company lowers full-year forecast
• Positive Sentiment: International operations and pricing supported growth. Stronger international performance helped offset pressure in North America, while pricing contributed to revenue gains. Management also highlighted healthier snack categories and plans for additional investment and cost reductions. PepsiCo Q3 Earnings and Revenues Beat Estimates on International Growth
• Positive Sentiment: Valuation and shareholder returns provide support. Commentators pointed to PepsiCo’s historically low valuation and roughly 4.7% dividend yield. The company expects to return approximately $8.9 billion to shareholders this year through dividends and buybacks. PepsiCo Stock Looks Poised to Bottom With High Yield, Deep Value
• Neutral Sentiment: Management is considering broader strategic options. Reports say PepsiCo is evaluating ways to improve its North American business, potentially including a business split, while expanding cost-cutting efforts. The long-term impact remains uncertain. Shifting Eating Habits Push PepsiCo to Weigh Options, Including a Split
• Negative Sentiment: Full-year guidance was reduced. PepsiCo lowered its fiscal 2026 core earnings-growth outlook to approximately 1%–2%, citing higher costs and margin pressure, particularly in North America. PepsiCo stock rises on earnings beat even as it lowers full-year profit forecast
• Negative Sentiment: U.S. consumer and beverage trends remain weak. North American soda volumes declined, and PepsiCo acknowledged that its beverage business is losing ground to Coca-Cola. Changing preferences, cost-conscious consumers and potential GLP-1 drug effects add pressure to its snacks and sugary drinks. PepsiCo Is Handing Market Share to Coca-Cola, Analyst Warns

Wall Street Analyst Weigh In

Several research analysts have weighed in on the company. Jefferies Financial Group reiterated a "hold" rating on shares of PepsiCo in a research note on Thursday. Evercore dropped their price objective on shares of PepsiCo from $150.00 to $135.00 in a research note on Wednesday, September 30th. Sanford C. Bernstein set a $134.00 target price on shares of PepsiCo in a report on Friday, July 10th. TD Cowen dropped their price target on shares of PepsiCo from $145.00 to $133.00 and set a "hold" rating on the stock in a research note on Monday, September 28th. Finally, Morgan Stanley reduced their price objective on shares of PepsiCo from $180.00 to $160.00 and set an "equal weight" rating for the company in a research report on Friday, July 10th. Five equities research analysts have rated the stock with a Buy rating, fourteen have issued a Hold rating and one has issued a Sell rating to the company's stock. According to data from MarketBeat.com, PepsiCo currently has a consensus rating of "Hold" and an average target price of $150.20.

Insider Transactions at PepsiCo

In other news, EVP David Flavell sold 2,900 shares of PepsiCo stock in a transaction that occurred on Monday, July 27th. The shares were sold at an average price of $139.54, for a total transaction of $404,666.00. Following the completion of the sale, the executive vice president directly owned 74,825 shares in the company, valued at approximately $10,441,080.50. This trade represents a 3.73% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Company insiders own 0.12% of the company's stock.

Hedge Funds Weigh In On PepsiCo

Several hedge funds and other institutional investors have recently bought and sold shares of PEP. BlackRock Inc. raised its stake in shares of PepsiCo by 2.1% during the 2nd quarter. BlackRock Inc. now owns 118,281,854 shares of the company's stock worth $16,015,363,000 after buying an additional 2,440,377 shares during the last quarter. State Street Corp increased its holdings in PepsiCo by 1.7% during the 2nd quarter. State Street Corp now owns 60,406,932 shares of the company's stock valued at $8,179,099,000 after acquiring an additional 987,582 shares in the last quarter. Auto Owners Insurance Co raised its position in PepsiCo by 14,857.8% during the fourth quarter. Auto Owners Insurance Co now owns 49,252,907 shares of the company's stock worth $7,068,777,000 after acquiring an additional 48,923,629 shares during the last quarter. Bank of America Corp DE lifted its holdings in shares of PepsiCo by 0.6% in the first quarter. Bank of America Corp DE now owns 21,283,701 shares of the company's stock valued at $3,305,146,000 after purchasing an additional 133,325 shares in the last quarter. Finally, UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC lifted its holdings in shares of PepsiCo by 4.9% in the second quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 11,817,684 shares of the company's stock valued at $1,600,114,000 after purchasing an additional 549,336 shares in the last quarter. 73.07% of the stock is owned by institutional investors and hedge funds.

PepsiCo Stock Up 3.7%

The company has a debt-to-equity ratio of 1.91, a current ratio of 0.93 and a quick ratio of 0.74. The firm's 50-day moving average price is $135.99 and its 200 day moving average price is $143.32. The firm has a market capitalization of $175.17 billion, a price-to-earnings ratio of 16.82, a price-to-earnings-growth ratio of 2.85 and a beta of 0.35.

About PepsiCo

PepsiCo, Inc NASDAQ: PEP is a global food and beverage company that develops, manufactures, markets and distributes a broad portfolio of snacks, drinks and convenient foods. Its beverage brands include Pepsi, Mountain Dew, Gatorade, 7UP in select markets, and bubly, while its food and snack brands include Lay's, Doritos, Cheetos, Tostitos, Fritos, Quaker and Ruffles.

The company's operations include beverage production and distribution, snack foods, convenient meals and nutrition-oriented products.

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