PepsiCo – recovery underway, outlook suggests a move towards 183 USD

PepsiCo is showing signs of recovery. In Q3, the company maintained earnings growth and stable margins despite weak sales in North America.

PepsiCo, Inc. (NASDAQ: PEP) reported results for Q3 of fiscal year 2025 that exceeded market expectations. Revenue reached 23.94 billion USD, up 3% year-on-year. Core earnings per share (EPS) rose to 2.29 USD, supported by strong international sales and improving performance in its North American beverages division.

Despite these achievements, the company continues to face challenges – sales growth in North America remains slow and costs remain elevated. However, price adjustments and effective portfolio management have helped to partially offset this pressure.

Management has maintained a cautious full-year outlook, expecting modest revenue growth and a slight decline in profit of around 0.5% compared with 2024 (previously estimated at −1.5%).

A key development was a management change: effective from 10 November 2025, Steve Schmitt, formerly Head of Finance at Walmart U.S., will assume the role of Chief Financial Officer. His appointment is expected to strengthen cost control and optimise financial planning processes.

Of particular note is the arrival of activist investor Elliott Investment Management among PepsiCo’s shareholders. According to media reports, the fund has invested around USD 4 billion in PepsiCo shares. The entry of such an investor typically places pressure on management to improve profitability and enhance shareholder value.

Investor reaction to PepsiCo’s report was positive: in the two days following publication, PEP shares rose by roughly 8%. The share price rise was driven by stronger-than-expected revenue and earnings results, an improved outlook for currency risks, and reaffirmed plans to return approximately USD 8.6 billion to shareholders in 2025. This suggests that demand for the stock is supported by solid fundamentals rather than a short-term market sentiment.

This article examines PepsiCo Inc.’s business model, revenue streams, and quarterly performance. It also provides a fundamental analysis of PEP, presents expert forecasts for 2025, and reviews PepsiCo Inc.’s share performance, which forms the basis for the PepsiCo Inc. stock forecast in 2025.

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 results

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, considering 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 results

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 included a 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 throughout the year.

PepsiCo, Inc. Q1 2025 results

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 demonstrated how the company is navigating challenges amid global trade disputes, shifting consumer preferences, and a volatile market environment. 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 launched strategic initiatives aimed at adapting to current market conditions. The company placed emphasis on products with higher added value, smaller packaging formats, 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 anticipated low single-digit organic revenue growth and a mid-single-digit increase in EPS in constant currency. Gradual improvement was expected in North America, supported by the implementation of ongoing commercial strategies, while the international segment remained a key driver of growth, with pronounced 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.

PepsiCo, Inc. Q2 2025 results

On 17 July 2025, PepsiCo released its Q2 2025 report for the period ending 14 June. The key financial metrics are as follows:

• Organic revenue: 22.97 billion USD (+2%)
• Net income: 1.26 billion USD (−59%)
• Earnings per share: 0.92 USD (−58%)
• Operating profit: 1.79 billion USD (−56%)

Organic revenue by segment:

• International Beverages Franchise: 1.39 billion USD (+5%)
• PepsiCo Beverages North America: 6.87 billion USD (+1%)
• PepsiCo Foods North America: 6.32 billion USD (−2%)

Organic revenue by region:

• Europe, Middle East and Africa: 4.47 billion USD (+7%)
• Latin America Foods: 2.92 billion USD (+6%)
• Asia Pacific Foods: 1.00 billion USD (unchanged)

For Q2 2025, PepsiCo reported results above market expectations. Organic revenue grew by 2% year-on-year, while GAAP EPS fell to 0.92 USD due to a one-off impairment of intangible assets amounting to 1.86 billion USD related to the Rockstar and Be & Cheery brands. In terms of growth structure, the main contribution came from prices, while overall volumes remained weak.

In North America, the anticipated improvements did not materialise, with Foods showing a 2% year-on-year organic decline due to weak volumes. Beverages in North America increased by 1%, driven by gradual volume growth and gains in Pepsi and Pepsi Zero Sugar market share. Outside the US, performance was stronger. International beverages under the franchise model rose 5%, while the entire international beverage business grew by 9%, supported by robust demand in Mexico, Brazil, Germany, Poland, France, Egypt, Turkey, Saudi Arabia, Pakistan, and Thailand.

The company reaffirmed its 2025 forecast, expecting low single-digit organic revenue growth and roughly flat core EPS in constant currency. Due to a reduction in currency impact, the negative FX effect for the year was lowered to -1.5 p.p. from the previously expected -3 p.p., which improves the USD core EPS outlook. Capital return plans remain unchanged – 8.6 billion USD for the year, including 7.6 billion USD in dividends and 1.0 billion USD through share buybacks. Management concentrated on restoring North America by emphasising value propositions, streamlining the product range, and implementing the One North America initiative, while potential additional supply chain costs and tariff risks are expected to be offset through productivity improvements and yield management.

PepsiCo, Inc. Q3 2025 results

On 9 October, PepsiCo released its Q3 2025 report for the period ended 6 September, which beat market expectations. The key financial indicators are as follows:

• Organic revenue: 23.94 billion USD (+3%)
• Net income: 2.60 billion USD (−11%)
• Earnings per share: 1.90 USD (−11%)
• Operating profit: 3.57 billion USD (−8%)

Organic revenue by segment:

• International Beverages Franchise: 1.29 billion USD (unchanged)
• PepsiCo Beverages North America: 7.32 billion USD (+2%)
• PepsiCo Foods North America: 6.53 billion USD (unchanged)

Organic revenue by region:

• Europe, Middle East and Africa: 5.02 billion USD (+9%)
• Latin America Foods: 2.66 billion USD (+2%)
• Asia Pacific Foods: 1.12 billion USD (+2%)

In Q3 2025, PepsiCo’s revenue reached 23.94 billion USD, up 3% year-on-year. Adjusted earnings per share stood at 2.29 USD, also exceeding analysts’ forecasts. The main contribution came from international operations and a recovery in beverage sales in North America.

Segment performance was mixed. In the Frito-Lay North America (snacks) segment, a slowdown was observed: sales volumes declined, although price increases partly offset the fall. This reflects weaker consumer activity in the US and a saturated snack market. At the same time, PepsiCo Beverages North America demonstrated positive dynamics – beverage sales increased thanks to strong performance in the Gatorade, Mountain Dew and Zero Sugar ranges, as well as expanded distribution both in stores and online.

International segments performed more strongly. In Latin America, revenue rose 2%, driven by price growth and stable demand in Mexico and Brazil. In Europe, conditions were more challenging: volumes fell slightly due to inflation and weak consumption in some markets. However, favourable pricing effects kept revenue broadly in line with the prior year. In AMEA (Africa, the Middle East and Asia), robust growth was recorded – particularly in India, Saudi Arabia and China, where beverage and snack sales grew at double-digit rates.

This structure shows that the international business has become the primary growth driver, offsetting weakness in North American snacks. For investors, this indicates that PepsiCo’s geographic diversification is working: the company is able to sustain overall revenue even amid local slowdowns in its core US market.

PepsiCo’s management reaffirmed a cautious full-year outlook. The company expects low single-digit organic growth and roughly flat earnings per share in constant currency compared with last year. The impact of currency fluctuations is now seen as milder – around −0.5 percentage points, down from the previous estimate of −1.5. This implies that core EPS for 2025 will decline by just 0.5% compared with 2024, an improvement on earlier expectations.

Despite the positive report, some challenges remain. Snack volumes in the US and specific beverage categories remain under pressure. Cost and logistics inflation continue to weigh on margins. In addition, PepsiCo has attracted attention from activist investor Elliott Investment Management, which, according to media reports, has acquired a significant stake in the company and is pushing for greater efficiency and cost reductions. This increases scrutiny of management but could also create internal tension and uncertainty, especially with the upcoming change in the Chief Financial Officer role – Steve Schmitt is set to assume the position in November.

Potential growth drivers include the company’s focus on renewing its product portfolio and fostering innovation. Key priorities include products without artificial ingredients and low-sugar beverages, such as expanded Zero Sugar and functional drink lines. PepsiCo is also implementing productivity and SKU optimisation programs aimed at supporting its price mix and margins. With gradual volume recovery expected in the second half of 2025 and into 2026, these measures could lay the groundwork for the next stage of growth.

Fundamental analysis of PepsiCo, Inc.

Below is the fundamental analysis of PepsiCo, Inc., following the company’s Q3 2025 results:

• Liquidity and access to financing: As of the end of Q3 2025, PepsiCo held approximately 8.1 billion USD in cash and equivalents, providing a comfortable liquidity buffer. The company has two undrawn revolving credit facilities of 5.0 billion USD each – a five-year facility maturing in May 2030 and a 364-day facility maturing in May 2026. Commercial paper remains an important source of short-term funding.
• Debt and leverage:

The debt structure showed no major changes compared with mid-year. Total borrowings as of Q3 stood at around 52 billion USD, with cash of 8.1 billion USD, leaving net debt at roughly 44 billion USD. The proportion of floating-rate debt after swaps remains close to 22%, and no significant changes in risk-management policy were disclosed for Q3. Interest payments continue to be comfortably covered by operating profit, with coverage ratios broadly in line with previous quarters.

• Cash flow and dividend coverage:

Management reaffirmed plans to return approximately 8.6 billion USD to shareholders in 2025 – including 7.6 billion USD in dividends and 1.0 billion USD through share buybacks. PepsiCo’s seasonality traditionally makes Q4 the strongest quarter for cash flow; dividends are therefore primarily covered by operating cash flow, while buybacks are executed flexibly, using debt when necessary.

Conclusion on the fundamental analysis of PepsiCo, Inc.:

The company’s international business and stronger beverage sales in North America helped offset weaker snack volumes in the US. PepsiCo maintains strong liquidity: cash reserves are ample, all credit lines remain open, and access to capital markets is unrestricted. The level of debt is elevated but manageable for a stable company with resilient cash flows. The main risks are linked to the slow recovery in US snack demand, cost inflation, and currency fluctuations.

The presence of activist investor Elliott Investment Management increases pressure on management to improve efficiency and optimise the business mix. Additional growth drivers include the reduction of underperforming SKUs, expansion of low-sugar and functional beverage lines, and continued initiatives to improve operational efficiency. Together, these measures should support margins and position the company for a more confident pace of growth in 2026.

PepsiCo share valuation:

At the current share price of around 148 USD and based on the 2025 forecast, which anticipates a decline in core EPS of roughly 0.5% compared with 2024 (8.16 USD), the forward P/E ratio is estimated at around 18×. The dividend yield is approximately 3.9% per annum, a solid figure for a stable company in the defensive sector. The total return, factoring in dividends and free cash flow, remains attractive for long-term, conservative investors.

Expert forecasts for PepsiCo, Inc. stock for 2025

• Barchart: 6 out of 21 analysts rated PepsiCo shares as Strong Buy, 14 as Hold, and 1 as Strong Sell. The upper target price is 170 USD, while the lower bound is 115 USD.
• MarketBeat: 5 out of 19 analysts assigned the stock a Buy rating and 14 a Hold recommendation. The upper target price is 178 USD, with the lower bound at 142 USD.
• TipRanks: 4 out of 13 surveyed analysts gave the shares a Buy rating and 9 recommended Hold. The highest target price is 172 USD, and the lowest is 140 USD.
• Stock Analysis: 3 out of 14 experts rated the stock as Strong Buy, 1 as Buy, and 10 as Hold. The upper forecast range reaches 178 USD, while the lower bound stands at 140 USD.

PepsiCo, Inc. stock price forecast for 2025

On the weekly chart, PepsiCo shares have formed an inverse Head and Shoulders pattern. Given that PEP has been trading in a downtrend since May 2023, the formation of this pattern suggests that the correction may be nearing completion and that the stock could soon resume its upward movement. Based on the current price dynamics, the scenarios for PepsiCo’s stock performance in 2025 are as follows:

Base-case forecast for PepsiCo stock: this scenario assumes a breakout above resistance at 156 USD, which coincides with the neckline of the Head and Shoulders pattern, followed by a rise towards the historical high at 183 USD.

Alternative forecast for PepsiCo shares: this scenario applies if the price breaks below support at 140 USD. In that case, PEP shares could decline towards 125 USD.

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