{ "@context": "https://frontierpicks.com/schemas/dossier.v1.json", "ticker": "PEP", "name": "PepsiCo, Inc.", "url": "https://frontierpicks.com/dossiers/PEP/", "json_url": "https://frontierpicks.com/dossiers/PEP.json", "status": "WATCHLIST", "current_conviction": "LOW", "archetype": { "code": "a4", "n": 4 }, "current_thesis": "PepsiCo shares look more likely to lag the S&P 500 over three months because North American snack profit and drink volume are shrinking while the stock has already climbed back to its 200-day average. The fourth-quarter report and first 2027 guidance, due about 5 February 2027, settle whether that profit stabilises.", "invalidation_trigger": "A daily close above $157, BNP Paribas' target after the third-quarter report, which would show the shares leading; or 2027 guidance that restores core EPS growth to the 4–6% range PepsiCo gave up on 2026-10-08.", "catalyst_date": null, "portfolio": null, "pick": null, "themes": [ "consumer-discretionary-rotation" ], "tags": [], "sources": [], "caveats": [], "source_links": [ { "title": "PepsiCo to eliminate about 1,000 North America roles", "url": "https://www.ttnews.com/articles/pepsi-cuts-1000-north-america", "date": "2026-11-09" }, { "title": "Pepsi Cratered in 2026: Goldman Sachs Says It’s Going Up 40% Soon", "url": "https://247wallst.com/investing/2026/10/09/pepsi-cratered-in-2026-goldman-sachs-says-its-going-up-40-soon/?tpid=1685720", "date": "2026-10-09" }, { "title": "KFC replacing Pepsi with Coca-Cola at 3,700 US restaurants after nearly four decades", "url": "https://www.fox7austin.com/news/kfc-replacing-pepsi-coca-cola-3700-us-restaurants-after-nearly-four-decades", "date": null }, { "title": "PepsiCo Secures Renewal Across Select KFC International Markets", "url": "https://www.prnewswire.com/news-releases/pepsico-secures-renewal-across-select-kfc-international-markets-302931690.html", "date": "2026-11-06" }, { "title": "Delhi High Court Lets PepsiCo And Monster Sell Existing ‘Energy Drink’ Stock But Bars Fresh Manufacture", "url": "https://lawchakra.in/high-court/delhi-high-court/energy-drink-delhi-high-court/", "date": null }, { "title": "Delhi High Court says PepsiCo, Monster can sell existing stocks of \"energy drinks\" but can't make more", "url": "https://www.barandbench.com/news/delhi-high-court-says-pepsico-monster-can-sell-existing-stocks-of-energy-drinks-but-cant-make-more", "date": null } ], "evidence": [ { "claim": "PepsiCo cut 2026 core constant-currency earnings per share growth guidance to 1–2% from the low end of 4–6%; organic revenue guidance about 3%.", "source": "PepsiCo third-quarter 2026 release (Form 8-K Exhibit 99.1)", "as_of": "2026-10-08" }, { "claim": "In the third quarter, PepsiCo Foods North America core constant-currency operating profit fell 12% with volume up 0.5%; PepsiCo Beverages North America volume fell 3%.", "source": "PepsiCo third-quarter 2026 release (Form 8-K Exhibit 99.1)", "as_of": "2026-10-08" }, { "claim": "PepsiCo is eliminating about 1,000 North American roles; North America CEO Ram Krishnan's memo said changes would come over the following week.", "source": "Bloomberg News via Transport Topics", "as_of": "2026-11-09" }, { "claim": "KFC will replace Pepsi with Coca-Cola at about 3,700 U.S. restaurants, starting January 2027 and finishing by spring 2027.", "source": "KFC announcement, reported by Fox", "as_of": "2026-10-16" }, { "claim": "The consensus price target for PepsiCo was $148.64 from 24 analysts, with 18 rating the shares Hold; 2026 EPS consensus fell to $8.55 from $8.64.", "source": "24/7 Wall St., 2026-10-09", "as_of": "2026-10-09" }, { "claim": "Director Robert C. Pohlad bought 184,646 PepsiCo shares in the open market at $128.28.", "source": "SEC Form 4 filed 2026-10-16", "as_of": "2026-10-14" }, { "claim": "Chairman and CEO Ramon Laguarta sold 30,000 PepsiCo shares in the open market at $135.13.", "source": "SEC Form 4 filed 2026-10-23", "as_of": "2026-10-21" }, { "claim": "More than 100 Pepsi-Cola drivers at Atlanta and Lithonia, Georgia, sites voted to authorise a strike over wages and benefits.", "source": "Teamsters statement, reported by Benzinga", "as_of": "2026-11-06" } ], "view_changes": [], "frame": null, "filed_numbers": { "as_of": "2026-11-13", "sector": "Consumer Defensive", "financials": { "status": "ok", "reason": null, "close_date": "2026-11-13", "latest_quarter": "2026-09-05", "figures": { "revenue": { "status": "ok", "quarters": [ { "end": "2026-09-05", "filed": "2026-10-08", "restated": null, "value_musd": 25274, "yoy_pct": 5.6 }, { "end": "2026-06-13", "filed": "2026-07-09", "restated": null, "value_musd": 24181, "yoy_pct": 6.4 }, { "end": "2026-03-21", "filed": "2026-04-16", "restated": null, "value_musd": 19443, "yoy_pct": 8.5 }, { "end": "2025-09-06", "filed": "2025-10-09", "restated": null, "value_musd": 23937, "yoy_pct": 2.7 }, { "end": "2025-06-14", "filed": "2025-07-17", "restated": null, "value_musd": 22726, "yoy_pct": 1 } ] }, "gross_margin": { "status": "ok", "quarters": [ { "end": "2026-09-05", "filed": "2026-10-08", "restated": null, "pct": 54.4 }, { "end": "2026-06-13", "filed": "2026-07-09", "restated": null, "pct": 54.2 }, { "end": "2026-03-21", "filed": "2026-04-16", "restated": null, "pct": 55.2 }, { "end": "2025-09-06", "filed": "2025-10-09", "restated": null, "pct": 53.6 }, { "end": "2025-06-14", "filed": "2025-07-17", "restated": null, "pct": 54.7 } ] }, "operating_margin": { "status": "ok", "quarters": [ { "end": "2026-09-05", "filed": "2026-10-08", "restated": null, "pct": 16.9 }, { "end": "2026-06-13", "filed": "2026-07-09", "restated": null, "pct": 16.6 }, { "end": "2026-03-21", "filed": "2026-04-16", "restated": null, "pct": 16.5 }, { "end": "2025-09-06", "filed": "2025-10-09", "restated": null, "pct": 14.9 }, { "end": "2025-06-14", "filed": "2025-07-17", "restated": null, "pct": 7.9 } ] }, "pretax_income": { "status": "ok", "end": "2026-09-05", "filed": "2026-10-08", "value_musd": 3904 }, "net_income": { "status": "ok", "end": "2026-09-05", "filed": "2026-10-08", "value_musd": 3048 }, "operating_cash_flow": { "status": "not available" }, "capital_spending": { "status": "not available" }, "free_cash_flow": { "status": "not available" }, "diluted_share_change": { "status": "ok", "end": "2026-09-05", "filed": "2026-10-08", "base_end": "2025-09-06", "pct": -0.4 }, "cash": { "status": "ok", "end": "2026-09-05", "filed": "2026-10-08", "value_musd": 11163 }, "debt": { "status": "ok", "end": "2026-09-05", "filed": "2026-10-08", "value_musd": 51881, "composition": "non-current long-term debt and finance leases plus short-term borrowings" }, "net_cash": { "status": "ok", "end": "2026-09-05", "filed": "2026-10-08", "value_musd": -40718 }, "deferred_revenue": { "status": "not reported" }, "backlog": { "status": "not reported" }, "receivables": { "status": "ok", "end": "2026-09-05", "filed": "2026-10-08", "value_musd": 13623 }, "inventory": { "status": "ok", "end": "2026-09-05", "filed": "2026-10-08", "value_musd": 6434 }, "equity": { "status": "ok", "end": "2026-09-05", "filed": "2026-10-08", "value_musd": 22292 }, "market_value": { "status": "ok", "close_date": "2026-11-13", "basis_end": "2026-10-01", "basis_filed": "2026-10-08", "value_musd": 198197.1 }, "enterprise_value": { "status": "ok", "close_date": "2026-11-13", "basis_end": "2026-10-01", "basis_filed": "2026-10-08", "value_musd": 238915.1 }, "ev_sales": { "status": "not available" }, "ev_ebit": { "status": "not available" }, "pe": { "status": "not available" }, "pb": { "status": "ok", "close_date": "2026-11-13", "basis_end": "2026-10-01", "basis_filed": "2026-10-08", "multiple": 8.9 }, "fcf_yield": { "status": "not available" } } }, "short_interest": { "status": "ok", "settlement": "2026-10-15", "published": "2026-10-26", "short_pct_of_outstanding": 2.02, "days_to_cover": 2.5, "change_pct": 18 }, "insiders": { "status": "ok", "as_of": "2026-11-15", "windows": [ { "days": 90, "status": "ok", "from": "2026-08-18", "bought_usd": 23686388.88, "sold_usd": 4053891, "bought_unpriced": 0, "sold_unpriced": 0 }, { "days": 365, "status": "ok", "from": "2025-11-16", "bought_usd": 23686388.88, "sold_usd": 10205206.51, "bought_unpriced": 0, "sold_unpriced": 0 } ] } }, "body_markdown": "## Current Thesis\n\nPepsiCo shares look more likely to lag the S&P 500 than lead it over the next three months. North American snack profit and drink volume are still shrinking, and the shares have already recovered to their 200-day moving average. The fourth-quarter report and first 2027 guidance, due around 2027-02-05, settle whether North American profit stabilises.\n\nThe rating is Low because the 2026-10-08 guidance cut put 2026 core earnings per share (EPS) growth at 1–2%. Every company event since then has concerned contracts, costs, labour or product launches, and none has shown North American demand turning. The roughly 1,000 North American job cuts reported on 2026-11-09 can support margins in 2027. They do not repair the 3% fall in third-quarter drink volume, and they do not replace the KFC U.S. restaurants that move to Coca-Cola from January 2027.\n\nPepsiCo closed at $142.26 on 2026-11-12, below the $148.64 consensus target from 24 analysts that 24/7 Wall St. cited on 2026-10-09, when 18 of those analysts rated the shares Hold. The market already prices a slow recovery. The lag case needs the recovery to come slower still, or a market that keeps favouring cyclical sectors over staples.\n\n## Bull Case\n\n- **A director bought heavily after the report.** Director Robert C. Pohlad bought 184,646 shares in the open market at $128.28 on 2026-10-14 (SEC Form 4, filed 2026-10-16). It is the only open-market purchase among insider filings since the third-quarter report.\n- **The shares have rebounded off the low.** The stock closed at $142.26 on 2026-11-12, up from a 52-week closing low of $123.73 on 2026-10-07, and is 2.1% higher over three months, based on adjusted daily closes.\n- **KFC stays with PepsiCo abroad.** PepsiCo renewed its KFC drink partnership on 2026-11-06 in Australia, India, the United Kingdom, Spain, Germany, France, the Netherlands and Belgium (company release). It disclosed no term, financial terms or restaurant count.\n- **Taco Bell stays with PepsiCo to 2036.** The 11-year renewal announced on 2026-10-22 covers U.S. Taco Bell restaurants plus Canada, the United Kingdom, Ireland and Thailand (PepsiCo release; Fox Business).\n- **Cost action has started.** North America CEO Ram Krishnan wrote in a 2026-11-09 memo that \"too much of how we work today remains complex and fragmented,\" with changes over the following week (Bloomberg News via Transport Topics). About 1,000 roles go, out of roughly 306,000 employees worldwide at the end of 2025.\n- **International growth is broad.** Third-quarter organic revenue, which excludes currency moves and acquisitions, grew 9% in Europe, Middle East and Africa, 9% at Asia Pacific Foods and 6% at Latin America Foods (company release, 2026-10-08).\n- **Shareholder returns are unchanged.** PepsiCo kept planned 2026 returns at $8.9 billion: $7.9 billion in dividends and $1.0 billion in buybacks (company release, 2026-10-08).\n\n## Bear Case\n\n- **Full-year profit guidance was cut.** PepsiCo expects 1–2% core constant-currency EPS growth for 2026, down from the low end of 4–6% (company release, 2026-10-08). Analysts cut their 2026 EPS consensus to $8.55 from $8.64, with 18 downward revisions in 30 days (24/7 Wall St., 2026-10-09).\n- **Snack profit is falling faster.** PepsiCo Foods North America core constant-currency operating profit fell 12% in the third quarter, after an 8% fall in the second (company releases). Volume rose 0.5% and organic revenue was flat.\n- **Drink volume is shrinking.** PepsiCo Beverages North America volume fell 3% in the third quarter (company release, 2026-10-08). KFC said on 2026-10-16 that Coca-Cola will replace Pepsi at about 3,700 U.S. restaurants from January 2027, finishing by spring (Fox).\n- **The CEO sold during the rebound.** Chairman and CEO Ramon Laguarta sold 30,000 shares in the open market at $135.13 on 2026-10-21 (SEC Form 4, filed 2026-10-23).\n- **Labour friction in distribution.** More than 100 Pepsi-Cola drivers at Atlanta and Lithonia, Georgia, sites voted to authorise a strike over wages and benefits, the Teamsters said on 2026-11-06 (Benzinga).\n- **Snack demand faces a policy risk.** The Trump administration proposed narrowing eligibility for the Supplemental Nutrition Assistance Program, a change officials estimate could block 6.3 million people (WSJ via Benzinga, 2026-11-09).\n- **India's labelling dispute is open.** The Delhi High Court on 2026-10-06 let PepsiCo and Monster sell existing \"energy drink\" stock but barred new manufacture under that label, with a hearing set for 2026-11-05 (LawChakra; Bar and Bench).\n\n## Setup & Price Structure\n\nPepsiCo closed at $142.26 on 2026-11-12. That sits just below the 200-day moving average of $143.69 and well above the 50-day moving average of $133.50, both from adjusted daily closes as of 2026-11-12. Closes between 2026-11-05 and 2026-11-12 held in a narrow $141.34–$143.94 range, so the rebound from the 2026-10-07 closing low of $123.73 has stalled at the 200-day average.\n\nThe 52-week intraday high is $171.48, set on 2026-02-12; the last close is 17.0% below it. A sustained run of closes above the 200-day average would show the market treating the October guidance cut as fully priced.\n\nFiled insider trades mark the post-report price range: Director Pohlad bought at $128.28 on 2026-10-14 and the CEO sold at $135.13 on 2026-10-21 (SEC Form 4 filings). Directors' stock awards were priced at $125.60 on 2026-09-30 to 2026-10-01, just before the report.\n\nBroker targets set after the report span Barclays' $126, Citi's $135 and JPMorgan's $137 at the low end to RBC Capital's $150, with BNP Paribas holding its target unchanged (Benzinga, 2026-10-09). Evercore ISI raised its target to $150 from $135 on 2026-10-28 (fiscal.ai). The shares now trade above three of those targets.\n\n## Catalyst Calendar\n\n- **~2026-11-16 (est.):** North American role cuts take effect, per the 2026-11-09 memo. Any restructuring charge or savings figure disclosed sizes how much cost cuts can support 2027 profit.\n- **~2026-11-19 (est.):** Quarterly dividend declaration, on PepsiCo's usual November timing. Shows whether the payout holds while 2026 core EPS growth guidance sits at 1–2%.\n- **~2026-12-31 (est.):** Price increases on some chips, sodas and dips begin at the end of 2026 or early 2027, per Bloomberg. Tests whether North American snack volume, up 0.5% in the third quarter, holds once earlier price cuts are partly reversed.\n- **~2027-01-15 (est.):** KFC begins switching U.S. restaurants from Pepsi to Coca-Cola. Starts removing a four-decade foodservice account from PepsiCo Beverages North America, where third-quarter volume fell 3%.\n- **~2027-02-05 (est.):** Fourth-quarter 2026 results and first 2027 guidance. Shows whether North American snack profit returns to growth and whether 2027 core EPS guidance gets back to the 4–6% range.\n\n## What Would Change Our Mind\n\nA daily close above $157, BNP Paribas' target after the third-quarter report, which would show the shares leading; or 2027 guidance that restores core EPS growth to the 4–6% range PepsiCo gave up on 2026-10-08.\n\n## Correlation Notes\n\nThe shares trade with defensive sectors. Benzinga's sector reports had defensives trailing on 2026-11-06, Consumer Staples near the top of an all-sector decline on 2026-11-10, and cyclicals leading with defensives trailing on 2026-11-11. A continued rotation toward cyclicals works against relative performance; a risk-off market works for it.\n\nCoca-Cola is the direct rival on restaurant contracts, as the KFC switch showed on 2026-10-16. Oil is the main cost link, through freight and plastic packaging. The India case ties PepsiCo to Monster Energy, Reliance's Campa and Red Bull, which have challenged the same regulator's directive in the Delhi High Court (LawChakra; Bar and Bench).", "first_seen": "2026-11-10", "last_analyzed": "2026-11-12T23:53:55+00:00", "last_synthesized": "2026-11-12", "date_modified": "2026-11-12", "license": "Content © FrontierPicks. Cite the canonical URL." }