PEP Stock Looks To Snap 6-Week Losing Streak: Goldman Sachs Trims Price Target But Sees ‘Decade Of Growth’ For PepsiCo

• Goldman Sachs cut its price target on PepsiCo to $165 from $180, still implying 28% upside. 
• The firm cited stronger quarterly sales and the consumer giant's decade-long growth potential.  
• PepsiCo plans cost cuts to fund beverage improvements and North American food investments.

PepsiCo Inc. (PEP) is looking to reverse a six-week losing streak as Goldman Sachs maintains a ‘Buy’ rating despite cutting its price target. Stronger third-quarter (Q3) sales and decade-long growth potential support optimism, while rising costs, margin pressure, and beverage execution challenges weigh on near-term earnings. 

PepsiCo stock edged 0.06% lower overnight on Thursday. The stock has gained nearly 2% so far this week. 

Goldman Sachs Retains Buy Rating On PepsiCo 

Goldman Sachs analyst Bonnie Herzog lowered her price target on PepsiCo to $165 from $180 but reiterated her ‘Buy’ recommendation, implying a 28% upside to the stock’s last closing price. PepsiCo reported 3.1% organic sales growth in Q3, beating analysts' consensus estimate of 2.9%. Growth also rose from 2.4% in the previous quarter, an encouraging sign for the company's sales performance. 

Goldman Sachs sees room for PepsiCo to deliver average annual organic sales growth in the mid-single digits over the next decade. The firm's longer-term outlook suggests that the company could strengthen its growth path as it works through current business challenges. 

PepsiCo now expects organic sales growth of approximately 3% in fiscal 2026, narrowing its previous forecast of 2% to 4%. Management also slashed its outlook for constant-currency earnings per share growth to 1% to 2%, down from 4% to 6%, with growth previously expected near the lower end of that range. 

PepsiCo CFO Flags Rising Costs 

During the Q3 earnings call, PepsiCo CFO Stephen Schmitt said the company is spending more to boost sales while facing higher costs, a weaker product sales mix, and execution issues.

“Margin performance is below where we expected it to be. Input costs are trending higher and mix has been a headwind in particular.”

Rather than pull back on spending, PepsiCo plans to continue funding important business initiatives. Schmitt said advertising and marketing expenditure has increased in both North America and international markets. 

CEO Ramon Laguarta said volume growth has fallen below the company's initial expectations, reflecting a challenging consumer environment and shortcomings in commercial execution. 

“Now we don't feel good about the beverage business. I think in the beverage business, as we put in our remarks, we're competing well in some platforms like hydration, like energy. We're not competing well in soft drinks. So we're putting all the urgency of the business and the focus in improving our performance in soft drinks.”

PepsiCo is reviewing expenses across the organization, including corporate overhead and centrally allocated costs. Laguarta said the savings will help finance investments in beverages and North American food operations. 

PEP Stock: Retail Stance 

On Stocktwits, retail sentiment around the stock slid to ‘bullish’ from ‘extremely bullish’. 

A user said, “Initiated a starter position today. Love the dividends.”

Another user said, “The sell-off is based on strong earnings - and mid-to-high single-digit revenue growth - despite the current harsh environment. It's completely nonsensical. How low can it go, and for how long, while revenue grows because of tariffs and high energy prices? IDK. All I can do is buy low.” 

PEP stock has declined over 10% year-to-date. 

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