PepsiCo Stock Drops After BofA Downgrade Piles On Barclays Rating Cut: Retail Appetite Weakens

PepsiCo (PEP) shares fell 2.7% on Tuesday, after Bank of America slashed its rating and price target on them, citing weak growth in the company's snacks segment in the North American market.

The Wall Street research firm lowered the rating to 'Neutral' from 'Buy' and price target to $155 to $185, according to The Fly.

Analysts at the firm said Frito-Lay North America's growth is likely to remain below the long-term trendline this year. 

While international segments are scaling and making large contributions to sales and profit growth, the research firm said it's not enough at this point to make up for slower growth at the North American snacks segment.

Given this, BofA expects limited opportunity for either topline outperformance, and low single-digit earnings per share growth in 2025 and 2026.

Last month, Barclays downgraded the company stock on weakness in the snacks business.

The weakness in the business could be exacerbated by the new U.S. import tariffs, which will likely increase consumer prices and hurt purchases.

PepsiCo and several other retail companies have sought an exemption from tariffs on certain ingredients not available from U.S. suppliers, according to a Reuters report last month.

On Stocktwits, retail sentiment edged lower in the 'bearish' territory. Message volume jumped slightly but was still 'low'

One user said the stock continues to face downward pressure based on patterns in its technical chart.

PepsiCo shares are down 6.1% year to date.

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