PepsiCo, Inc.’s (NYSE: PEP) Q4 2024 report showed a decline in sales in its North American Frito-Lay and Quaker Foods divisions, with the latter affected by product recalls due to salmonella. The company’s management also highlighted a shift in consumer demand towards healthier eating. Following the report’s release, PepsiCo’s stock fell, reflecting investor concerns over the shortfall in revenue and changing consumer preferences.
This article examines PepsiCo, Inc.’s business, detailing its income sources, presenting its quarterly reports, and providing a fundamental analysis of PEP. Expert forecasts for PepsiCo’s stock in 2025 are also provided, alongside an analysis of PepsiCo’s stock performance, which serves as the basis for the PepsiCo 2025 stock forecast.
PepsiCo, Inc. is an American multinational corporation that produces and sells food, soft drinks, and snacks. Its portfolio includes well-known brands such as Cheetos, Gatorade, Lay’s, Mountain Dew, Pepsi, Quaker, and Tropicana. The company was founded in 1965 by merging Thе Pepsi-Сola Company and Frito-Lay. On 13 November 1972, PepsiCo, Inc. went public on the NYSE, and its shares have since traded under the PEP ticker symbol.
PepsiCo divides its operations into three major segments and publishes information on each separately in its quarterly reports. Below are the segments in which the company operates:
In its reports, PepsiCo provides detailed information for each segment only in North America, while revenues from other regions are presented as a consolidated total. PepsiCo’s business model demonstrates that it operates across three markets simultaneously, enabling it to diversify its revenues.
On 8 October, PepsiCo reported its financial results for Q3 2024. Below are the key figures from the report:
Revenue by segment:
Revenue by region:
PepsiCo’s management noted that the company demonstrates resilience despite challenging conditions. The crucial issues in Q3 were the recall of Quaker products over potential Salmonella contamination and geopolitical tensions in some international markets.
CEO Ramon Laguarta emphasised that the company has remained profitable thanks to strict cost control and continued investment in its competitiveness. However, in light of these challenges, PepsiCo has revised its Q4 and full-year 2024 revenue outlook. Revenue growth is now expected to fall below the previous projection of 4%, while the forecast for EPS growth remains at a minimum of 8%. Nonetheless, PepsiCo retains a positive outlook for the full year 2024.
Although its financial performance declined year-on-year, its stock price rose following the earnings release.
On 3 February 2025, PepsiCo released its Q4 2024 report. Its key financial highlights are outlined below:
Revenue by segment:
Revenue by region:
In its commentary on the report, PepsiCo’s management highlighted the company’s current challenges and outlined its future plans. One of the key factors affecting financial performance was a shift in consumer preferences, particularly in North America. Declining demand for salty snacks and beverages impacted revenue in these segments. However, management emphasised that the company is actively adapting its products to evolving trends, including the growing interest in healthier food. In this context, they underscored PepsiCo’s success in launching products such as Pepsi Zero Sugar and SunChips, which cater to changing consumer preferences.
The 2025 forecast projects low-single-digit growth in organic revenue and a mid-single-digit increase in adjusted EPS. Despite the current challenges, this reflects moderate optimism regarding the company’s continued expansion. The company also announced a 5% dividend increase and a share buyback program, with a total budget of approximately 8.6 billion USD.
Additionally, PepsiCo reiterated its commitment to innovations, product diversification, and marketing initiatives to sustain future growth. Management expressed confidence that these measures would drive improved performance in North America throughout the year.
It is worth noting that the price of PepsiCo stock as of 11 February was 144 USD, meaning the downside targets predicted by the experts have already been reached. As a result, only the upside targets remain.
The salmonella incident with PepsiCo products negatively impacted the share price. Since October 2024, the stock has ended each month with losses, ultimately dropping by 15% to the 141 USD support level. Based on PepsiCo’s stock performance, possible price movements for 2025 are as follows.
The optimistic PepsiCo stock forecast suggests a rebound from the 141 USD support level, followed by growth towards an all-time high of 182 USD. This scenario is supported by an increase in dividends and a share buyback, creating more demand for the stock.
The negative PepsiCo stock forecast predicts a breakout below
the 141 USD support level, potentially pushing the share price down to the next support at 115 USD. A rebound from this level will indicate the beginning of another growth wave in PepsiCo’s share price.
PepsiCo, Inc. stock analysis and outlook for 2025Investing in PepsiCo, Inc. stock carries several risks, outlined below:
PepsiCo faces challenges such as shifts in consumer preferences towards healthier eating, geopolitical risks, and inflation, which will be harder to pass on to consumers as their interest may significantly decline. To navigate these upcoming difficulties, PepsiCo must actively drive innovation and develop new products by reducing sugar content and using natural ingredients. It is also essential to balance quality and price to remain competitive, which can be achieved through optimising production processes.
In its 2025 forecasts, PepsiCo’s management focuses on cost reduction and innovation, suggesting that the company is on the right track, with execution now being the key challenge. Investors initially reacted negatively to the report’s results on the day of publication, but the low established on 4 February has yet to be breached. This indicates that interest in the shares is returning as market participants continue to believe in the company’s strategy and expect it to meet its targets.
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.