PepsiCo (PEP) Enters a New Strategic Chapter as BNP Paribas Highlights Earnings Upside

Core Insights - PepsiCo, Inc. has been recognized as one of the 12 best long-term stocks to buy, indicating strong investor confidence in its future performance [1] - BNP Paribas upgraded PepsiCo's rating to Outperform from Neutral, setting a price target of $179, and raised its FY27 EPS forecast by approximately 5% due to recent activist involvement [2] - Despite a challenging operating environment, PepsiCo's brand strength has allowed it to implement price increases during inflationary periods [4] Financial Performance - Over the past 12 months, PepsiCo's shares have declined nearly 1.5%, attributed to softening demand as consumers shift towards health and wellness, alongside rising living costs and production expenses [3] - For the first three quarters of 2025, organic revenue increased by 1.5%, while core EPS saw a decline of 3.5%, indicating pressure on profitability [5] - Management is guiding for low single-digit organic revenue growth in full-year 2025 and flat core EPS on a constant currency basis, reflecting cautious expectations [3] Strategic Initiatives - PepsiCo has pursued acquisitions to drive growth, including the purchase of SodaStream in 2018, Rockstar Energy in 2020, and more recently, Siete Foods and Poppi in early 2025 [5] - The company is diversified beyond its flagship cola, owning brands like Frito-Lay, Quaker, Mountain Dew, and Gatorade, which enhances its presence in both snacks and beverages [6]