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PepsiCo Stock: Gauging Analysts’ Sentiment

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Current recommendations

As of February 6, 2018, PepsiCo (PEP) stock was rated as a “buy” by 13 out of 24 (or 54%) analysts covering the stock. Eleven analysts had a “hold” rating for the stock, while none of the analysts rated it as a “sell.” On January 29, SunTrust Robinson initiated coverage on PepsiCo stock with a “hold” recommendation and a target price of $125.00.

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Growth prospects

PepsiCo is a leading snack food and beverage company with an extensive presence in over 200 countries. Aside from its wide geographical presence, the company’s strengths also include a strong brand name, a massive product portfolio, and an impressive distribution network. PepsiCo owns several popular global brands, including $22 billion brands like Pepsi, Lays, and Quaker. Each of the global brands generates over $1 billion in estimated annual retail sales.

Changing consumer tastes are pushing PepsiCo and Coca-Cola (KO) to innovate their beverage offerings with low or no-sugar versions and expand in healthier categories like bottled water and ready-to-drink tea. PepsiCo is also focusing on introducing better choices in its snack food business with low salt variants and a higher usage of natural ingredients.

Recent target price changes

On January 4, Wells Fargo raised its target price for PepsiCo stock to $115 from $110. On January 8, Susquehanna increased its target price to $137 from $132. On the same day, Cowen and Company raised its target price to $133 from $128. On February 1, Credit Suisse raised its target price to $124 from $122.

As of February 6, the average 12-month target price for PepsiCo stock was $125.49. The target price indicates an upside potential of 10.5%—compared to the closing stock price of $113.56 on February 6.

PepsiCo’s upcoming results on February 13, 2018, will likely result in more revisions to its target price.

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