PepsiCo lowers its 2025 forecast: stock under pressure after weak quarterly results

Consumers’ focus on saving, along with rising tariff-related costs, is weighing on PepsiCo stock. Against this backdrop, the risk of a decline in PEP quotes to 110 USD remains.

PepsiCo’s (NYSE: PEP) Q1 fiscal 2025 report showed a 1.8% fall in net revenue to 17.9 billion USD and a 10% drop in net income to 1.8 billion USD, attributed to higher tariff-related costs and reduced consumer spending. Although revenue slightly exceeded expectations, the company revised its 2025 guidance, now projecting EPS to remain flat at last year’s level of 8.16 USD rather than the growth previously forecast. Investors reacted negatively: the company’s shares fell by 5% following the report release. They continued to decline amid growing concerns about PepsiCo’s ability to cope with economic headwinds and shifting consumer behaviour.

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 offered, alongside an analysis of PepsiCo’s stock performance, which serves as the basis for the PepsiCo 2025 stock forecast.

About PepsiCo, Inc.

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, Inc.’s main revenue streams

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:

• Frito-Lay: this segment focuses on producing and selling a variety of snacks. The range includes products from well-known brands, such as Cheetos, Doritos, Lay’s, Ruffles, and Tostitos. These high-margin products support PepsiCo’s leading position in the US salty snack market
• Quaker Foods: this includes Quaker products, one of the pioneering brands in PepsiCo’s portfolio, which specialises in healthy eating. Quaker offers cereal bars, cereals, muesli, oatmeal, and other products. This sector focuses on breakfast and healthy eating products
• PepsiCo Beverages: this segment represents the entire range of PepsiCo’s drinks, including soft drinks (Mountain Dew, Pepsi), sports and energy drinks (Gatorade), purified drinking water (Aquafina), tea, and juices (Lipton, Tropicana). Drinks are the company’s core business and generate the majority of revenue

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.

PepsiCo, Inc. Q3 2024 report

On 8 October, PepsiCo reported its financial results for Q3 2024. Below are the key figures from the report:

• Revenue: 23.32 billion USD (-0.6%)
• Net income: 2.93 billion USD (-5.0%)
• Earnings per Share: 2.13 USD (-4.9%)
• Operating profit: 3.87 billion USD (-3.6%)

Revenue by segment:

• Frito-Lay North America: 5.89 billion USD (-1.2%)
• PepsiCo Beverages North America: 7.17 billion USD (+0.1%)
• Quaker Foods North America: 648.00 million USD (-13.2%)

Revenue by region:

• Latin America: 2.91 billion USD (-4.6%)
• Europe: 3.94 billion USD (+6.4%)
• Africa, Middle East, and East Asia: 1.55 billion USD (-6.2%)
• Asia-Pacific: 1.19 billion USD (-1.4%)

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.

PepsiCo, Inc. Q4 2024 report

On 3 February 2025, PepsiCo released its Q4 2024 report. Its key financial highlights are outlined below:

• Revenue: 27.78 billion USD (-0.2%)
• Net income: 1.52 billion USD (+15.4%)
• Earnings per share: 1.11 USD (+18.1%)
• Operating profit: 2.25 billion USD (+33.7%)

Revenue by segment:

• Frito-Lay North America: 7.31 billion USD (-2.1%)
• PepsiCo Beverages North America: 7.91 billion USD (-2.1%)
• Quaker Foods North America: 874.00 million USD (-0.1%)

Revenue by region:

• Latin America: 3.69 billion USD (-6.9%)
• Europe: 4.47 billion USD (+6.2%)
• Africa, Middle East, and East Asia: 2.03 billion USD (+4.9%)
• Asia-Pacific: 1.48 billion USD (+2.1%)

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 includes low single-digit growth in organic revenue and a mid-single-digit increase in adjusted EPS. Despite current challenges, this reflects moderate optimism about 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 reaffirmed its commitment to innovation, product diversification, and marketing initiatives aimed at sustaining future growth. Management expressed confidence that these measures would support improved performance in North America over the course of the year.

PepsiCo, Inc. Q1 2025 report

PepsiCo published its Q1 2025 report on 24 April 2025. Below are the key figures from the report:

• Revenue: 17.92 billion USD (-1.8%)
• Net income: 1.84 billion USD (-10%)
• Earnings per share: 1.33 USD (-10%)
• Operating profit: 2.58 billion USD (-5%)

Revenue by segment:

• International Beverages Franchise: 0.76 billion USD (+3%)
• PepsiCo Beverages North America: 5.87 billion USD (unchanged)
• PepsiCo Foods North America: 6.21 billion USD (-1%)

Revenue by region:

• Europe, Middle East and Africa: 2.39 billion USD (-2%)
• Latin America Foods: 1.67 billion USD (-12%)
• Asia-Pacific Foods: 1.02 billion USD (-2%)

PepsiCo’s Q1 2025 report highlights the company’s efforts to navigate a challenging environment shaped by global trade disputes, evolving consumer preferences, and ongoing market volatility. Revenue declined by 1.8% year-on-year, with EPS at 1.33 USD, slightly below analysts’ expectations.

Tariffs notably impacted results, particularly a 10% tariff on soda concentrate imports from Ireland and a 25% duty on aluminium imports. These measures increased production costs, compressing margins and prompting the company to revise its 2025 guidance.

In response to these challenges, PepsiCo is pursuing strategic initiatives aimed at adapting to the current environment. The company focuses on products with high added value, smaller packaging, and healthier attributes. In this context, the acquisition of the Poppi prebiotic soda brand for nearly 2 billion USD stands out, demonstrating PepsiCo’s commitment to expanding its healthy drinks portfolio.

For Q2 2025, PepsiCo’s management expects low single-digit organic revenue growth and a mid-single-digit increase in EPS in constant currency. Performance in North America is projected to improve gradually as the company rolls out its commercial strategies. At the same time, the international segment remains a key driver of growth with strong margin expansion.

Investors reacted negatively to PepsiCo’s Q1 2025 report, with declining sales in North America, particularly in the Quaker Foods division, and the downward revision of the full-year profit forecast as the main factors fuelling investor concerns. As a result, PepsiCo stock fell by 5% after the report’s release and continued to decline, extending a downward trend that began after its May 2023 peak. Analysts have also revised their estimates downwards.

Expert forecasts for PepsiCo, Inc. stock for 2025

• Barchart: seven out of 20 analysts rated PepsiCo stock as Strong Buy, 12 as Hold, and one as Strong Sell. The highest target price is 172 USD, while the lowest is 124 USD
• MarketBeat: four of 18 specialists assigned a Buy rating to the stock, 13 recommended Hold, and one advised Sell. The highest target price is 183 USD, and the lowest one is 160 USD
• TipRanks: four of 14 surveyed analysts gave the stock a Buy rating, while 10 recommended Hold. The highest target price is 175 USD
• Stock Analysis: three out of 14 experts rated the stock as Strong Buy, one as Buy, and 10 as Hold. The highest target price is 178 USD

PepsiCo, Inc. stock price forecast for 2025

On the weekly timeframe, PepsiCo shares breached the lower boundary of the descending channel, signalling a high probability of a further decline in PEP quotes. Based on PepsiCo’s stock performance, the possible price movements in 2025 are outlined below.

The optimistic forecast for PepsiCo stock suggests the price may decline towards the ascending trendline near 123 USD. Subsequently, a rebound from this level could lead to a retest of the previously breached channel boundary at 135 USD.

Further developments will depend primarily on the Q2 2025 results. Should the company report weaker financials, the stock could pull back from the 135 USD level, potentially pushing the price lower towards the next support level at 110 USD.

Conversely, if the Q2 2025 results exceed analysts’ expectations and the company issues positive guidance for the following quarter, PEP quotes could confidently break above the 135 USD resistance level. In this scenario, the potential upside target would be at 166 USD.

Risks of investing in PepsiCo, Inc. stock

Investing in PepsiCo, Inc. stock carries several risks, outlined below:

• Declining consumer demand: there is a risk of reduced demand for key product categories, particularly in the Frito-Lay North America and Quaker Foods segments. Consumers are increasingly choosing healthier alternatives, which may negatively impact the sales of traditional snacks
• Inflationary pressure and rising costs: increasing prices for raw materials, transportation, and labour could reduce PepsiCo’s profitability. Despite efforts to raise prices and cut costs, further inflation could weaken consumers’ purchasing power and limit the company’s ability to pass on costs to buyers
• Currency fluctuations: most of the company’s revenue comes from international markets. Therefore, a stronger US dollar could reduce profitability when converting foreign income
• Regulatory and operational risks: major product recalls could result in significant financial losses and reputational damage. In Q4 2024, Quaker Foods faced a recall due to salmonella contamination. Such incidents could undermine consumer trust and increase costs
• Restructuring and automation risks: PepsiCo is closing four bottling plants in the US and is actively implementing automation, which requires significant investment. If these measures do not lead to the expected improvements in efficiency and cost reductions, they could pressure the company’s profitability
• Competitive pressure: PepsiCo faces tough competition from traditional rivals such as Coca-Cola (NYSE: KO) and new health-focused brands. The success of its portfolio expansion strategy with products like Pepsi Zero Sugar and SunChips is still uncertain