As of October 5, 2017, PepsiCo stock was rated a “buy” by 55.0% (12 of 22) analysts. Ten analysts have rated the stock a “hold,” and none of them have rated it a “sell.” On October 2, 2017, prior to the company’s fiscal 3Q17 results on October 4, 2017, PEP stock was downgraded by Jefferies to a “hold” rating from a “buy.” Jefferies also lowered its price target for PEP stock that day to $108 from $133. On October 5, 2017, after the fiscal 3Q17 results, Jefferies further lowered its price target for PEP stock to $107 from $108.
Revisions to price target
On October 4, 2017, Susquehanna raised its price target for PEP stock to $136 from $135. On October 5, 2017, Credit Suisse reduced its price target to $122 from $124, and Deutsche Bank cut its price target to $122 from $125. JPMorgan has lowered its price target to $127 from $133.
Overall, the average 12-month price target for PEP stock was $122.62 as of October 5, 2017. That reflects an upside potential of 11.0% compared to its closing price of $110.45 on October 5, 2017.
PepsiCo is a snack food and beverage giant with an extensive product portfolio that includes 22 billion-dollar brands that generate more than $1.0 billion in annual retail sales. Those brands include Pepsi, Gatorade, Lay’s, Quaker, and Mountain Dew.
Changing tastes of consumers are making PepsiCo focus on healthier snack food and beverage options with low or no sugar, less salt, and low-fat levels. In the beverage space, the company has been focusing on increasing its presence in noncarbonated beverages as soda volumes continue to decline in several key markets. In the fiscal 3Q17 conference call, PepsiCo’s CEO (chief executive officer) Indra Nooyi said the company has increased its mix of noncarbonated beverages by seven percentage points since 2010.
The company is also focusing on its e-commerce presence. In the conference call, Nooyi said the company has a team of 200 e-commerce professionals to capture growth opportunities in the online space.
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