Track market-moving stories before they get noisy

PepsiCo (PEP -2.20%) stock has reached a critical juncture, presenting an opportunity for investors. The company's struggles have led to a falling stock price and, by extension, a rising dividend yield.

More importantly, recent events have aligned in a way that could lead to a long-awaited stock price recovery. Also, its rising profits bode well for its continued dividend growth.

Here is what happened that turned PepsiCo around and how it can benefit stock investors.

Image source: The Motley Fool.

PepsiCo's value as an income stock
As conditions stand now, new PepsiCo shareholders will earn a 4.3% dividend return. That is far above the 3.2% average yield of the last five years, and well above the 1.1% S&P 500 (^GSPC -0.52%) average.

That return stems from its $5.92-per-share annual dividend. Moreover, since the company has amassed a 54-year record of annual payout hikes, PepsiCo is a Dividend King.

The Dividend King status is critical because a company must raise its payout for at least 50 consecutive years to achieve it. Such a status makes a stock attractive to certain dividend funds. It also likely means that ending the increases would undermine confidence in the stock, a compelling incentive for PepsiCo to maintain the current pace of payout hikes.

Furthermore, free cash flow for the trailing 12 months was $10.8 billion. Since dividend costs are on track to reach about $8 billion for the fiscal year, the company can likely afford to maintain and increase the payout.

Why the income (and stock price) growth is likely to continue
Additionally, dividend funding is likely to improve.

Until recently, PepsiCo appeared destined for stagnation or possibly decline. Consumers had increasingly turned against the unhealthy beverages and packaged foods that define most of the company's product lineup.

In recent years, PepsiCo has responded. The company selectively cut prices and cut some of its products. It then offered health-conscious products and put healthier ingredients in others. It also acquired Siete Foods, a brand focused on healthy ingredients, to build on these initiatives.

Consequently, in the first nine months of fiscal 2026 (ended Sept. 5), revenue of $69 billion climbed 7% annually from year-ago levels. In contrast, revenue increased by less than 1% annually in the first three quarters of 2025.

Expenses climbed at a slower pace, meaning the $8.4 billion in net income for the first nine months of 2026 was up 47% over the same period.

PEP PepsiCo$135.77-$3.06 (-2.20%)

NASDAQ · As of 4:00 PM ET 10/23/26

Unfortunately, the stock has not responded, and it is down for the year. Nonetheless, that drop has taken its P/E ratio to 17, a level near multiyear lows. Such a valuation arguably adds to the draw when income investors know they can earn 4.3% in dividend returns.

Investing in PepsiCo stock
As conditions stand now, new PepsiCo investors can buy a high-yielding, stable, and rising income stream at a discounted valuation.

Indeed, PepsiCo had struggled to adapt to shifting consumer tastes. However, it has adjusted its product lines to address that change, and sales have risen as a result.

Assuming that trend continues, PepsiCo investors should benefit from a generous dividend at a discounted price, possibly making it an undervalued dividend stock you can buy and hold forever.

PepsiCo (PEP - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.

Shares of this food and beverage company have returned +8.3% over the past month versus the Zacks S&P 500 composite's -1.2% change. The Zacks Beverages - Soft drinks industry, to which PepsiCo belongs, has gained 7.1% over this period. Now the key question is: Where could the stock be headed in the near term?

Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.

Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.

Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.

For the current quarter, PepsiCo is expected to post earnings of $2.24 per share, indicating a change of -0.9% from the year-ago quarter. The Zacks Consensus Estimate has changed -8.4% over the last 30 days.

The consensus earnings estimate of $8.42 for the current fiscal year indicates a year-over-year change of +3.4%. This estimate has changed -2.1% over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $8.64 indicates a change of +2.6% from what PepsiCo is expected to report a year ago. Over the past month, the estimate has changed -3.9%.

With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #4 (Sell) for PepsiCo.

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.

For PepsiCo, the consensus sales estimate for the current quarter of $30.41 billion indicates a year-over-year change of +3.6%. For the current and next fiscal years, $99.3 billion and $101.68 billion estimates indicate +5.7% and +2.4% changes, respectively.

Last Reported Results and Surprise HistoryPepsiCo reported revenues of $25.27 billion in the last reported quarter, representing a year-over-year change of +5.6%. EPS of $2.34 for the same period compares with $2.29 a year ago.

Compared to the Zacks Consensus Estimate of $24.88 billion, the reported revenues represent a surprise of +1.59%. The EPS surprise was +2.18%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.

ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

PepsiCo is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about PepsiCo. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.

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Pepsi will continue to be poured at Taco Bell restaurants, as will specialty drinks Mountain Dew Baja Blast and Kickstart Orange Citrus.

That's because the company behind those beverages, PepsiCo (PEP +3.07%) , announced Thursday that it signed an 11-year extension to its existing collaboration with Taco Bell. PepsiCo will continue to be the exclusive provider of soda and other liquid concoctions at the ever-popular fast-food restaurant's outlets. Here are the particulars of the new deal, at least the ones the beverage and snack giant was willing to provide.

Image source: The Motley Fool.

Ringing the BellThe pact, which will be in force through 2036, covers all U.S. Taco Bell locations, as well as outlets of the brand extensions Taco Bell Cantina and Live Más Cafe. This also applies to Taco Bells in Canada, the U.K., Ireland, and Thailand. The popular and exclusive PepsiCo products served at the restaurants, especially the beloved Baja Blast, will remain, as will company standards such as Pepsi and Mountain Dew.

PepsiCo did not provide the financial particulars of the new agreement.

The timing of the Taco Bell extension is ideal. Only last week, another longtime partner, KFC, opted to oust PepsiCo as its exclusive beverage purveyor in favor of that company's eternal rival, Coca-Cola (KO +2.87%), effective at the start of next year. Interestingly, both Taco Bell and KFC are operated by the same restaurant conglomerate, Yum! Brands (YUM +2.12%), a business spun off from PepsiCo in 1997 (hence the legacy beverage supply arrangements).

In PepsiCo's press release on the renewed Taco Bell deal, the company quoted its president of the Global Away From Home unit, Anne Fink, as saying that "Some of PepsiCo's best foodservice innovations have come from partnerships that challenge us to think differently, and Taco Bell has always brought that energy."

PEP PepsiCo$138.83+$4.13 (+3.07%)

NASDAQ · As of 4:00 PM ET 10/22/26

Innovators wantedWhat's interesting to me about both developments is that they seem to share a single theme. It's stronger in the PepsiCo Taco Bell announcement, which features the word "innovation" and its variations eight times, including the quote above. The real value in the new arrangements seems to be the exclusive drinks that the beverage partner has either helped introduce, or can introduce, in the future.

Baja Blast, co-developed by PepsiCo and Taco Bell, was a real departure for the pair, a new, distinctive, and exclusive offering that set the latter apart and enhanced its appeal. In fact, in the Taco Bell renewal announcement, PepsiCo took pains to mention that Baja Blast -- for which it holds the registered trademark and a host of other intellectual property rights -- is now a billion-dollar brand. Taco Bell surely doesn't want to lose that mojo.

KFC and PepsiCo made a similar plunge into special drinks with the 2019 rollout of Sweet Lightning. The gold-colored soft drink with the peach flavor didn't make anywhere near the splash Baja Blast did, not least because its introduction came shortly before the onset of the coronavirus pandemic and its deleterious effect on the restaurant business. Sweet Lightning is still on the menu at KFC, at least for now, as are other drinks that are essentially cream additions to standard offerings.

It feels to me, then, that KFC and Taco Bell both chose the beverage company they believed was most innovative. For the former, it was the powerhouse Coca-Cola, while the latter opted to stay with the partner that helped develop its smash-hit exclusive drink.

Wins and lossesWithout knowing the financial details of the Taco Bell extension, it’s tough to gauge how much it'll affect PepsiCo's fundamentals. It's undoubtedly encouraging by comparison, at least, since the Mexican-themed fast-food slinger’s U.S. sales are much higher than KFC’s.

Nevertheless, as KFC remains a major presence on this continent’s quick-dining scene, I'd imagine PepsiCo was eager to sign the deal after losing that business. So the Taco Bell extension might not be more lucrative than the legacy arrangement. Given what we know, I'd rate the new pact as a clear victory for PepsiCo, if not a major game changer.

And that's something that would concern me about the company. With flat-lining organic sales in its crucial North America beverage and snacks operations, it needs bigger wins. Sure, it has a high-yield dividend that pays out at 4.4% these days, but I don't think that's enough to support or increase its share price alone. I'd give PepsiCo stock a miss, despite Thursday's indisputably good news.

Key Takeaways PEP's $3B-plus portion-controlled snack business is strengthening its focus on affordability and convenience.North American snack volumes shifted from low-single-digit declines to low-single-digit growth in 2026.PEP's $3B-plus permissible snacks portfolio and new products support growth despite cost and margin pressures.
PepsiCo, Inc. (PEP - Free Report) is strengthening its North American snacks business by focusing on affordability, portion control and innovation to address evolving consumer preferences. With consumers increasingly seeking value-oriented snacking options, the company is expanding its presence in convenient, portion-controlled formats. PepsiCo's 100-calorie and 120-calorie snack packs represent a business exceeding $3 billion, highlighting the growing importance of these offerings. This platform could support category growth by improving affordability, expanding consumption occasions and strengthening consumer engagement.

PepsiCo's portion-controlled snacks strategy complements its broader portfolio transformation. The company also boasts a permissible snacking portfolio generating more than $3 billion in sales, featuring brands such as SunChips, Smartfood, Simply and PopCorners. Innovation initiatives, including Doritos Protein and premium offerings featuring avocado and olive oils, further strengthen its growth prospects. These efforts, alongside strategic pricing adjustments and increased marketing investments, are yielding encouraging results. North American snack volumes have improved from low-single-digit declines last year to low-single-digit growth in 2026, accompanied by market share gains.

Looking ahead, PepsiCo intends to accelerate investments in high-growth snacking platforms while improving operational efficiency and commercial execution. Its emphasis on affordable formats, innovation and targeted advertising could sustain volume recovery and strengthen market competitiveness. However, persistent consumer spending pressures, rising input costs and margin headwinds remain concerns. Nevertheless, the expanding portion-controlled snacks business, supported by improving volumes and portfolio diversification, positions PepsiCo to pursue sustainable growth in North American snacks.

KDP and KO Focus on Innovation and Affordability to Drive GrowthKeurig Dr Pepper Inc. (KDP - Free Report) and The Coca-Cola Company (KO - Free Report) are leveraging product innovation, affordable packaging, portfolio diversification and strategic investments to drive growth amid evolving consumer preferences.

Keurig Dr Pepper continues to focus on product innovation, portfolio diversification and strategic pricing to strengthen its position in the beverage market. The company is leveraging its extensive portfolio, including Dr Pepper, Canada Dry, GHOST and Core Hydration, to address evolving consumer preferences across different consumption occasions. Its emphasis on brand investments, distribution expansion and revenue management supports growth amid a value-conscious consumer environment. In second-quarter 2026, KDP's U.S. Refreshment Beverages business delivered double-digit sales and earnings growth, reflecting strong execution and brand momentum. Continued innovation, targeted marketing and productivity initiatives could help the company sustain demand and strengthen its competitive position despite ongoing cost pressures.

Coca-Cola is emphasizing affordability, packaging innovation and portfolio optimization to drive growth amid changing consumer spending patterns. The company's focus on smaller packaging formats, including mini cans, allows it to offer accessible price points while addressing demand for portion-controlled beverages. Coca-Cola is also leveraging its diversified portfolio, including Coca-Cola Zero Sugar, to capitalize on evolving consumption trends. In second-quarter 2026, global unit case volume increased 5%, while organic revenues advanced 6%, supported by volume growth and favorable price/mix.

PEP’s Price Performance, Valuation & EstimatesShares of PepsiCo have lost 0.2% in the past three months against the industry’s rise of 9.6%.

Image Source: Zacks Investment Research

From a valuation standpoint, PEP trades at a forward price-to-earnings ratio of 15.61X, below the industry’s average of 20.18X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for PEP’s 2026 and 2027 earnings implies year-over-year growth of 3.7% and 2.9%, respectively. The company’s EPS estimates for 2026 and 2027 have moved southward in the past seven days.

Image Source: Zacks Investment Research

PepsiCo trades nearly 19% below its 52-week high while Wall Street sits overwhelmingly on the sidelines, but one struggling business unit holds the key to whether this Dividend King is a bargain or a trap.

Short-term Treasurys now pay more than some beloved dividend stocks, which forces a question retirees rarely had to ask: do decades of consecutive raises still beat a government-backed yield you can lock in today?

The Federal Reserve raised the upper bound of its target range from 3.75% to 4.00% on September 17, 2026, and short-term Treasury yields moved in tandem. On October 20, 2026, Treasury par yields were 4.51% at one year, 4.79% at two years, and 4.86% at three years. Short-duration bond funds do most of their buying in that range. Those rates are what a fund earns when it replaces bonds that mature, before fees are taken out. Each fund reports its own yield, and that yield changes as it turns over its holdings.

How a Short-Duration Bond Fund Pays You and Why the Rate Keeps Changing
A short-duration bond fund is a mutual fund or exchange-traded fund that holds a large basket of bonds maturing in about one to five years. Depending on the fund, those bonds are Treasurys, high-grade corporate bonds, or a mix. You buy shares. The fund collects interest from its bonds and passes it to you, usually once a month. For income, three factors matter.

The yield floats. Bonds inside the fund mature all the time, and the manager reinvests that cash at current rates. When rates rise, the fund’s income rises within months. When rates fall, it drops. Nothing is locked in. You can see how fast the underlying rates change: the 13-week Treasury bill’s coupon-equivalent yield was 4.10% on October 1, 2026, and 4.19% on October 20, 2026.
The fund never matures. A single Treasury note pays back its face value on a set date. A fund has no maturity date, so it never promises to return a par value. You get out by selling shares at the current net asset value (NAV), which may be higher or lower than what you paid.
The share price moves, but less than longer bond funds. When rates rise, existing bonds lose value, and the fund’s NAV falls. Short bonds are close to paying back their principal, so the drop is smaller than in intermediate- or long-term bond funds, and the higher reinvestment rate starts to make up the loss sooner. A smaller drop is still a loss. Funds that hold corporate bonds also carry credit risk if the companies that issued them run into trouble.

Fees come straight out of the yield, so the expense ratio directly lowers the income you receive. Also know what protection you have. FDIC insurance does not cover bond funds, even ones sold at a bank. When a fund owns Treasurys, the U.S. government guarantees each bond’s interest and principal at maturity.

That guarantee does not cover the fund’s share price or its distributions. SIPC coverage at a brokerage protects your account if the firm fails, up to SIPC’s limits. It does not protect against market losses.

Reinvestment risk works against you too. Short-duration funds reprice quickly when rates rise, and they reprice just as quickly when rates fall. If the Fed reverses its September 2026 increase, the fund’s income will drop within months.

Dividend Safety Comes First When You Compare Payouts to a Floating Fund Yield
A higher yield matters only if the payment keeps coming. The five dividend payers below are among the most widely held income stocks among retirees. They are listed from the most secure payout to the one with the most specific risks.

Company
Latest Dividend
Frequency
Annualized Forward Dividend
Record

Johnson & Johnson (NYSE:JNJ | JNJ Price Prediction)
$1.34
Quarterly
$5.36
64 consecutive annual increases

Procter & Gamble (NYSE:PG)
$1.0885
Quarterly
$4.354
70 consecutive years of increases

Coca-Cola (NYSE:KO)
$0.53
Quarterly
$2.12
Dividend King

PepsiCo (NASDAQ:PEP)
$1.48
Quarterly
$5.92
Over 50 consecutive annual increases

Realty Income (NYSE:O)
$0.2715
Monthly
$3.258
115 consecutive quarterly increases

Johnson & Johnson raised its quarterly dividend 3.1% to $1.34 per share in early 2026, its 64th consecutive annual increase. Second-quarter revenue came in at $25.31 billion, up 6.6% from a year earlier. Growth in oncology is offsetting lost sales from STELARA as biosimilar competitors take share.

Procter & Gamble has raised its dividend for 70 consecutive years and paid one for 136 consecutive years. It generated $15.8 billion in free cash flow in fiscal 2026. For fiscal 2027, it plans about $10 billion in dividends, even with an expected ~$1 billion hit from higher commodity and other costs.

Coca-Cola yielded about 2.18% as of October 21, 2026. That is below what one-year Treasurys paid on October 20. Coca-Cola makes up the gap with growth. It expects free cash flow of about $12.4 billion in 2026, and its quarterly payment rose from $0.51 in 2025 to $0.53 in 2026.

PepsiCo yielded about 4.18% as of October 21, 2026, the highest of the four Dividend Kings in this group. The payout itself looks secure, with about $7.9 billion in dividends planned for 2026. However, its earnings growth has slowed. On October 8, 2026, PepsiCo cut its core EPS growth outlook to +2.5% to +3.5%, citing rising input costs. It also reported that core operating profit at Frito-Lay North America fell 12%. Slower earnings make it harder for dividend raises to keep their recent pace.

Realty Income has the highest yield in the group, about 5.48% on a trailing basis as of October 21, 2026, and it comes with the most specific risks. Adjusted funds from operations (AFFO), the cash-flow measure REITs use to fund dividends, covers the payout comfortably. Management raised its 2026 AFFO guidance to $4.44-$4.45 per share, and occupancy is 98.8%. However, 65.7% of its tenant exposure is to tenants without investment-grade credit ratings, and net debt runs at 5.4x EBITDAre. REIT share prices also tend to fall when rates rise. Realty Income’s shares fell 2.96% through October 21, 2026. On the other hand, the board declared another monthly dividend of $0.2715 on October 13, 2026.

A Dividend Can Be Cut, and It Can Also Grow
A dividend can be cut. A board sets it each quarter or month and is under no legal obligation to pay it. The bonds inside a fund pay interest that is fixed by contract. Even so, the fund’s total payout still moves with market rates and can fall.

A dividend can also grow. Coca-Cola’s quarterly dividend rose from $0.46 in 2023 to $0.485 in 2024, $0.51 in 2025 and $0.53 in 2026. A short-duration fund’s income has no built-in growth. It goes up only when rates go up.

The two respond to rate moves in opposite ways. After the September 2026 Fed increase, short-term yields rose, and short-duration funds pick up that higher income as bonds roll over. Rate changes do not directly change these companies’ dividends, but higher yields can push down the share prices of rate-sensitive income stocks. If rates fall, fund income falls with them, while a company with a long raise record would likely keep raising. On October 20, 2026, the 10-year Treasury yield was 0.33% above the two-year. When longer bonds yield more than shorter ones like this, investors in short-duration funds give up some yield in exchange for less price risk.

Taxes Can Decide the Choice Before Yield Does
Bond fund distributions are taxed as ordinary income. A taxable bond fund passes along interest income, which appears on Form 1099-DIV as ordinary dividends and is taxed at your regular income tax rate. Distributions of net short-term capital gains from a fund are also included on Form 1099-DIV as ordinary dividends. Funds that hold mostly Treasurys may pass through interest that is exempt from state income tax in many states. The fund’s year-end tax statement shows how much qualifies.

Most dividends from U.S. companies get lower rates. Coca-Cola, Johnson & Johnson, Procter & Gamble, and PepsiCo pay qualified dividends. Qualified dividend income includes dividends from domestic corporations under 26 U.S.C. § 1(h)(11)(B)(i). Those dividends are taxed at the same 0%, 15%, or 20% maximum rate that applies to long-term capital gains. To qualify, you must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date.

Realty Income follows REIT rules. Its distributions generally do not qualify for qualified-dividend rates and are taxed as ordinary income, the same as bond fund payouts. A portion may qualify for the Section 199A deduction, which reduces taxable income. In a traditional IRA, these differences go away, because all withdrawals are taxed as ordinary income. In a taxable account, the lower rate on qualified dividends can outweigh a large difference in yield.

Which Retirees Each Income Stream Fits
Short-duration bond funds suit retirees who need money for planned spending within a few years, want income that rises when the Fed raises rates, and can accept a share price that moves somewhat and a payout that shrinks when rates fall. Johnson & Johnson, Procter & Gamble, Coca-Cola, and PepsiCo suit retirees with longer time horizons and taxable accounts, who are willing to ride out stock-price swings for payouts backed by decades of raises. Realty Income fits retirees who want monthly checks and a higher starting yield and who accept that REITs are sensitive to rates and carry tenant credit risk.

Contact [email protected] for any questions or corrections.

Pepsi's stock is sliding while Coca-Cola's surges, and most analysts are blaming the wrong culprit. The real threat to Pepsi has nothing to do with losing a fast food contract and everything to do with a structural problem quietly eroding…

Coca-Cola’s (NYSE: KO | KO Price Prediction) stock is up 38% this year. The S&P is up 12%. Pepsi’s (NYSE: PEP) stock is down 7%. The apparent reason is that KFC replaced Pepsi with Coke. It is more than that. Coke is the premier soft drink at McDonald’s (NYSE: MCD), Burger King, and Wendy’s.

Another sign of Pepsi’s problem is that, according to research firm Beverage Digest, Pepsi’s soft drink market share is 8.1%. In 2000, that was 13.6%. By that yardstick, Dr Pepper has passed it. Coke’s share is flat over the period at just above 18%.

Pepsi has also hurt investors. In the most recent quarter, revenue rose 6% to $25.7 billion. “Core EPS” was up 2% to $2.34. It has diversified into brands that include Lay’s, Quaker, and Lipton.

Coke’s third-quarter revenue was $13.4 billion, much smaller than Pepsi’s. EPS rose 16% to $1.03. It has also diversified, mostly into beverages. It claims to have 32 brands worth more than $1 billion each.

The odd thing is that Pepsi has a market cap of $182 billion. Coke’s is $401 billion. That means Coke is valued at more than 2x Pepsi, which seems strange. Most experts believe this is because Coke’s margins on sales to bottlers are better than Pepsi’s margins on snack sales. This means Coke’s operating margin is $0.29 per dollar of sales. Pepsi’s are $0.12 based on a comparable model.

KFC is not Pepsi’s problem. Margins are

Contact [email protected] for any questions or corrections.

Douglas A. McIntyre

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

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His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

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For retirees in high tax brackets, the headline yield on a dividend stock often tells less than half the story. Before you count PepsiCo's income as income, there is a tax column that can flip the comparison entirely.

Municipal bonds pay holders interest that is generally exempt from federal income tax. Taxable yields have risen: the ten-year Treasury par yield stood at 5.15% on October 19, 2026, and the 52-week Treasury bill averaged 4.47% the same day. Muni yields differ by issuer, credit rating, maturity, and state, so this edition covers the muni side broadly and puts it against a well-known payer: PepsiCo (NASDAQ:PEP | PEP Price Prediction), which yields about 4.20% as of October 20, 2026. For a retiree in a high tax bracket, the tax column often decides the matter before the yield column does.

What a Municipal Bond Actually Promises You A municipal bond is a loan to a state, city, school district, utility, hospital authority, or other public body. The issuer pays interest on a set schedule, usually twice a year, and returns the face value (par) at maturity. Under federal law, gross income “does not include interest on any State or local bond,” 26 U.S.C. § 103(a), though there are exceptions.

Most munis carry a fixed coupon set when they are issued. That coupon remains fixed until the bond matures or is called. The bond’s market price changes daily. When rates rise, as they did when the Fed lifted its upper target to 4.00% on September 17, 2026, from 3.75%, existing bond prices fall. Some munis, such as variable-rate demand notes, reset their rates on a schedule, so read the offering terms before assuming a rate is locked.

Backing depends on the bond type:

General obligation bonds rely on the issuer’s taxing power. Revenue bonds rely on income from a specific project, such as tolls, water fees, or hospital charges. Munis carry no FDIC insurance, and the federal government does not guarantee them. Private bond insurers wrap some, and that protection is only as good as the insurer’s own finances.

Four Risks the Coupon Doesn’t Cover Default risk: High-grade muni defaults are historically rare, but they happen, especially with revenue bonds tied to a single project. Price risk: Hold to maturity, and you get par back if the issuer pays. Sell early after rates rise and you may take a loss. Call risk: Many munis let the issuer redeem early, usually after rates have fallen. Your highest-coupon bonds are often the first to go. Reinvestment risk: After a bond matures or gets called, you reinvest at whatever rates are available then, and they may be lower. PepsiCo’s Dividend Against a Fixed Coupon Dividend safety comes first, because a higher yield is no bargain if the dividend could be cut. PepsiCo has announced its 54th consecutive annual dividend increase, a 4% raise that lifted the annualized payout to $5.92 per share starting with the June 2026 payment. The quarterly check is $1.48, up from $1.4225 and $1.355 in the two prior cycles. In 1999 it paid $0.13 a quarter.

The coverage picture is solid but has reduced. PepsiCo expects to return about $8.9 billion to shareholders in fiscal 2026, including roughly $7.9 billion in dividends. It targets free cash flow conversion of at least 80%, and interest coverage runs about 10.3x. A debt-to-equity of roughly 2.45 suggests the company relies heavily on borrowed money.

Earnings are showing the pressure. Third-quarter adjusted EPS of $2.34 beat the $2.30 estimate, and revenue rose 5.6% to $25.27 billion. North America snacks core operating profit fell 12%, though. Management cut fiscal 2026 core EPS growth guidance to 2.5% to 3.5% from 5% to 7%, blaming input cost inflation. When dividends grow faster than earnings for long, the cushion shrinks. Keep an eye on next year’s raise.

Both sides of the comparison count:

A dividend can be cut, and a muni coupon cannot. PepsiCo’s board decides each payment. Its record shows no dividend reductions, but that record describes what the company paid in the past and guarantees nothing about future payments. A muni coupon is a contract. Barring default, it gets paid. A dividend can grow, and a fixed coupon cannot. A muni bought this year pays the same dollars in its final year as in its first, and inflation erodes that income every year. PepsiCo’s payout has risen with inflation over decades. The principal acts differently too. PepsiCo shares traded at $134.16 on October 20, 2026, down 9.58% over one year and 2.67% over five years, but up 72.36% over ten. A stock has no maturity date and no promise to return what you paid. A muni held to maturity does make that promise, backed by the issuer’s credit. A yield on a stock or a bond measures income alone. Price changes decide what you actually earn.

Tax Treatment That Often Decides the Answer Municipal Bond Interest Federal tax exemption is the main appeal, but it comes with limits:

Private activity bonds: Interest on private activity bonds that don’t meet the qualified-bond rules is taxable under 26 U.S.C. § 103(b)(1). Some munis that are tax-exempt for regular tax still count toward the alternative minimum tax, and the IRS reports that portion separately on Form 1099-INT, box 9. State taxes: Many states tax interest from other states’ bonds. New York, for example, adds back “interest income on obligations of any state other than this state,” under N.Y. Tax Law § 612(b)(1). In-state bonds often escape state tax as well, which matters most in states with high tax rates. Social Security: Tax-exempt interest is added back when figuring out how much of your Social Security benefit is taxable, under 26 U.S.C. § 86(b)(2)(B). Muni income can still raise your tax bill indirectly. Account placement: Holding munis in an IRA wastes the exemption, because IRA withdrawals follow retirement-plan tax rules (IRS Publication 550). To compare a muni with a taxable yield, use the tax-equivalent yield: divide the muni yield by one minus your marginal tax rate. The higher your bracket, the more the exemption is worth. For tax year 2026, the 24% bracket starts above $105,700 for single filers ($211,400 for married couples filing jointly). The 32% bracket starts above $201,775 ($403,550 for married couples filing jointly). The top 37% rate applies above $640,600 ($768,700).

PepsiCo Dividends PepsiCo dividends generally count as qualified dividend income, which the tax code taxes at capital gains rates under 26 U.S.C. § 1(h)(11). Depending on your income, that rate is 0%, 15%, or 20%. Shares must be held for more than 60 days within 121 days around the ex-dividend date to qualify. Higher earners may also owe the 3.8% net investment income tax under 26 U.S.C. § 1411(a)(1). Retirees with taxable income in the 0% qualified-dividend bracket get little extra from muni tax exemption. A retiree paying 32% or more in ordinary income tax, plus state tax, gets a lot.

Who Each Income Stream Suits Municipal bonds suit retirees in high federal and state brackets who need a fixed payment schedule and a known return of principal at a specific date, and who can hold to maturity and accept call and reinvestment risk. PepsiCo suits retirees in lower brackets, or with long time horizons, who want income that can grow with inflation and who can accept share-price swings and the chance of a dividend freeze. Many households split the job: munis cover fixed bills, and dividend growers cover the rising costs ahead (the mix, the payment calendar, and the withdrawal order are detailed in a free guide to building a paycheck from savings).

Municipal bonds suit retirees in high federal and state brackets who need a fixed payment schedule and a known return of principal at a specific date, and who can hold to maturity and accept call and reinvestment risk. PepsiCo suits retirees in lower brackets, or with long time horizons, who want income that can grow with inflation and who can accept share-price swings and the chance of a dividend freeze. Many households split the job: munis cover fixed bills, and dividend growers cover the rising costs ahead.

Contact [email protected] for any questions or corrections.

From warming breakfasts to shareable snacks, discover simple ways to make cold-weather days feel a little brighter

, /PRNewswire/ -- As temperatures fall and evenings grow darker, homes become more inviting. Across PepsiCo's (NASDAQ: PEP) food and drink brands, familiar favorites can make staying in feel special, from a slow weekend brunch or easy family dinner to a film night with snacks within reach.

A montage of PepsiCo food and drinks for cozy season. A warm start to a chilly day with Quaker
Quaker Oats bring a cozy warmth to the mornings and naturally contain whole grain and soluble fiber, making them a good start to the day. Served steaming with apple, cinnamon, nuts or seeds, they make an everyday breakfast feel suited to the season; baked ahead, they can also become an easy dish for a slower morning shared around the table.

Oats can go beyond the bowl, too. Try Quaker oat banana bread for a rainy-day baking session or serve Quaker Japanese fluffy pancakes with fruit, cinnamon or syrup for a slower weekend brunch.

Cold-weather classics with a crunch
When everyone comes in from the cold, the best dinners often begin with something dependable and with PepsiCo brands can lend added convenience to your meal prep, including our Lay's potato chips.

A grilled cheese sandwich already has everything a cold day calls for but to really up the crunch, add in your favorite flavor of Lay's to create Lay's Ultimate Grilled Cheese. The result is a familiar favorite with an extra savory snap, ideal sliced into smaller pieces for sharing. For something more substantial, Lay's Katsu Curry pairs a warming curry sauce with a crisp Lay's coating, showing how a familiar bag of chips can become an ingredient rather than simply a side. 

If a bowl of soup is your go-to ritual to warm up as the thermostat drops, bring your own unique flavor spark and follow the latest Instagram trend, garnishing with Lay's or Ruffles for added bite.

Make the night in, an occasion
Once dinner gives way to a film, a game or a long conversation, the food can become more relaxed. Smartfood offers ready-to-share popcorn, while its U.S. Fiberpop range provides 6 grams of fiber per serving and includes the fall-inspired Toffee & Sea Salt flavor. PopCorners Protein offers 9 grams of protein per serving in crunchy, popped, never fried pieces, including Cinnamon Delight. For a help-yourself spread, set out Lay's and Ruffles, Tostitos scoops and Doritos tortilla chips with salsa, queso or other dips. Try Ruffles Baked Potato dip or Tostitos Beef Queso dip, add Sabra hummus and serve chilled Pepsi beverages alongside.

When snacks become a part of dinner, recipes like Doritos Loaded Pepsi-marinated pork is a dish built for sharing. Set out the components separately and everyone can assemble a combination to suit them. For a sweet finish, Churros-inspired Doritos Loaded combines cinnamon-sugar flavor with Doritos crunch for a casual gathering or movie night.

For a chef-inspired crowd-pleaser, try one of Gordon Ramsay's Doritos Loaded recipes, such as Doritos Loaded Chicken Hellfire Nachos.

Flavors of the season
Bring seasonal warmth, spice and all things nice to what you eat over the coming months with limited edition flavor releases from some of PepsiCo's best loved brands.

In the U.S., Pepsi Vanilla Cream launches in October with a nostalgic flavor reminiscent of fall baking. Serve chilled with a savory Lay's spread or as part of a seasonal taste test with friends.

Starbucks ready-to-drink beverages bring seasonal flavors on the go. Starbucks New Pumpkin Spice Frappuccino Chilled Coffee Drink combines coffee with warming pumpkin spice, while Starbucks Peppermint Mocha Frappuccino Chilled Coffee Drink pairs coffee, chocolate and peppermint. Both are ready for commutes, autumn walks or busy afternoons.

The moments we remember
Cozy season is about the moments around the food: a warm bowl of Quaker oats on a chilly morning, or Lay's and Doritos Loaded shared with friends. PepsiCo brands can be part of the everyday rituals that make autumn and winter memorable.

For more ways to embrace colder days, explore the comforting dishes in the FLVR winter recipe collection or More Smiles With Every Bite recipe site.

About PepsiCo
PepsiCo products are enjoyed by consumers more than one billion times a day in more than 200 countries and territories around the world. PepsiCo generated nearly $94 billion in net revenue in 2025, driven by a complementary beverage and convenient foods portfolio that includes Lay's, Doritos, Cheetos, Gatorade, Pepsi-Cola, Mountain Dew, Quaker, and SodaStream. PepsiCo's product portfolio includes a wide range of enjoyable foods and drinks, including many iconic brands that generate more than $1 billion each in estimated annual retail sales.

Guiding PepsiCo is our vision to Be the Global Leader in Beverages and Convenient Foods by Winning with pep+ (PepsiCo Positive). pep+ is our strategic end-to-end transformation that places sustainability at the center of our business strategy, seeking to drive growth and build a stronger, more resilient future for PepsiCo and the communities where we operate. For more information, visit www.pepsico.com, and follow on X (Twitter), Instagram, Facebook, and LinkedIn @PepsiCo.

Katie O'Mahony, [email protected]

SOURCE PepsiCo, Inc.

PepsiCo, Inc. (NASDAQ:PEP – Get Free Report) Director Robert Pohlad purchased 184,646 shares of the firm’s stock in a transaction that occurred on Wednesday, October 14th. The stock was bought at an average price of $128.28 per share, for a total transaction of $23,686,388.88. Following the transaction, the director directly owned 433,009 shares of the company’s stock, valued at $55,546,394.52. This trade represents a 74.35% increase in their position. The purchase was disclosed in a filing with the SEC, which is accessible through this link.

PepsiCo Stock Up 2.4% PEP stock opened at $131.49 on Friday. PepsiCo, Inc. has a 52 week low of $123.47 and a 52 week high of $171.48. The business has a 50-day simple moving average of $134.44 and a 200 day simple moving average of $142.25. The company has a quick ratio of 0.76, a current ratio of 0.94 and a debt-to-equity ratio of 1.90. The company has a market cap of $179.19 billion, a PE ratio of 16.52, a price-to-earnings-growth ratio of 3.92 and a beta of 0.35.

PepsiCo (NASDAQ:PEP – Get Free Report) last announced its quarterly earnings data on Wednesday, October 7th. The company reported $2.34 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $2.29 by $0.05. PepsiCo had a net margin of 11.09% and a return on equity of 53.08%. The firm had revenue of $25.27 billion for the quarter, compared to the consensus estimate of $24.95 billion. During the same period in the prior year, the company posted $2.29 earnings per share. The business’s revenue for the quarter was up 5.6% on a year-over-year basis. Sell-side analysts anticipate that PepsiCo, Inc. will post 8.41 EPS for the current fiscal year.

Analyst Upgrades and Downgrades PEP has been the topic of a number of recent analyst reports. Jefferies Financial Group reissued a “hold” rating on shares of PepsiCo in a research note on Thursday, October 8th. TD Cowen cut their target price on PepsiCo from $145.00 to $133.00 and set a “hold” rating for the company in a research note on Monday, September 28th. BNP Paribas Exane reduced their target price on PepsiCo from $161.00 to $157.00 and set an “outperform” rating on the stock in a report on Friday, October 9th. Piper Sandler decreased their price target on PepsiCo from $176.00 to $140.00 and set an “overweight” rating on the stock in a research note on Friday, October 9th. Finally, Wells Fargo & Company lowered their price target on PepsiCo from $140.00 to $135.00 and set an “equal weight” rating for the company in a report on Monday, October 5th. One analyst has rated the stock with a Strong Buy rating, five have issued a Buy rating, fourteen have issued a Hold rating and one has assigned a Sell rating to the company’s stock. Based on data from MarketBeat.com, PepsiCo presently has a consensus rating of “Hold” and a consensus price target of $145.50. Get Our Latest Report on PEP

Institutional Investors Weigh In On PepsiCo Hedge funds have recently made changes to their positions in the stock. Evergreen Advisors LLC acquired a new stake in PepsiCo in the first quarter valued at approximately $25,000. Montgomery Financial Services LLC acquired a new position in shares of PepsiCo during the second quarter worth $25,000. Gunpowder Capital Management LLC dba Oliver Wealth Management acquired a new position in shares of PepsiCo during the fourth quarter worth $26,000. Atlatl Advisers LLC bought a new position in shares of PepsiCo in the 2nd quarter valued at $31,000. Finally, Osterweis Capital Management Inc. bought a new position in shares of PepsiCo in the 2nd quarter valued at $31,000. 73.07% of the stock is currently owned by institutional investors and hedge funds.

Key PepsiCo News Here are the key news stories impacting PepsiCo this week:

Positive Sentiment: Director Robert Pohlad bought 184,646 shares for approximately $23.7 million, increasing his direct ownership by 74.35%. The purchase may signal confidence that PepsiCo’s depressed valuation does not reflect its long-term prospects. SEC insider transaction filing Positive Sentiment: Bank of America maintained a Hold rating but raised its price target to $145, suggesting balanced risk-reward and potential upside from current levels. The firm cited strength at Taco Bell as partially offsetting the KFC loss. Bank of America rating update Neutral Sentiment: PepsiCo announced a €500 million offering of 3.750% senior notes. The proceeds strengthen funding flexibility, although the transaction adds to the company’s already elevated debt burden. PepsiCo euro-denominated senior notes announcement Neutral Sentiment: PepsiCo, its foundation and Feed the Children reported distributing 2 million meals through a school-based hunger-relief program. The announcement supports corporate reputation but is unlikely to materially affect earnings. PepsiCo hunger-relief program announcement Negative Sentiment: KFC will replace Pepsi beverages with Coca-Cola products at U.S. restaurants beginning in January 2027, with a full rollout expected by spring. Although KFC represents a limited portion of PepsiCo’s sales, investors view the loss as a setback for its U.S. food-service business and brand presence. Reuters report on KFC switching beverage suppliers Negative Sentiment: In India, PepsiCo warned that its Sting and Adrenaline Rush energy drinks could run out within two months after a court declined to suspend restrictions on “energy drink” labeling. The dispute could cause supply disruptions and allow competitors such as Red Bull to gain share. PepsiCo India energy-drink supply report PepsiCo Company Profile (Get Free Report)

PepsiCo, Inc (NASDAQ:PEP) is a global food and beverage company whose portfolio includes Pepsi-Cola, Mountain Dew, Gatorade, Lay’s, Doritos, Cheetos, Quaker, Tostitos, Fritos, and SodaStream. Its products span carbonated soft drinks, sports and energy beverages, bottled water, juices, convenient foods, snacks, and other packaged food offerings.

The company sells products through retail stores, restaurants, food-service providers, e-commerce platforms, and other distribution channels. PepsiCo serves consumers in North America and international markets across Latin America, Europe, Africa, the Middle East, and Asia-Pacific.

See Also Five stocks we like better than PepsiCo Rocket Lab’s Neutron Delay Leaves Wall Street Bullish But Raises the Stakes for 2027 ManpowerGroup Stock Sinks on Q3 Results, But Fundamentals Stay Solid Does the AI Selloff Put Alphabet’s Breakout in Doubt? Bank Earnings Are Mixed—These 2 ETFs Offer Very Different Paths to a Recovery Receive News & Ratings for PepsiCo Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for PepsiCo and related companies with MarketBeat.com's FREE daily email newsletter.

Raising dividends through two recessions takes more than a good brand name. Three companies with streaks stretching back decades show exactly what separates a payout that survives a crisis from one that quietly disappears.

A retirement income stream has two jobs. It has to arrive every quarter, and it has to grow faster than the grocery bill, whatever the economy is doing. Dividend Kings are companies that have raised their payouts for at least 50 straight years, so they have the longest public record of doing both. The three names below raised their dividends through the 2008 financial crisis and the 2020 pandemic recession, and all three pay for those dividends out of free cash flow rather than borrowed money. The longest streak in the group belongs to Procter & Gamble (NYSE:PG | PG Price Prediction), which just completed its 70th consecutive annual dividend increase.

Procter & Gamble: Everyday Staples Behind the Longest Streak
P&G sells things households keep buying in a recession: Tide, Pampers, Gillette, Crest, Charmin and Dawn. At $158.42, its annualized forward dividend of $4.354 per share works out to a yield of about 2.75%. That yield is modest. P&G’s strength is how well the payment is covered.

P&G produced $15.835 billion of free cash flow in fiscal 2026, up 12.74%, on operating cash flow of $19.556 billion. Dividends for the year came to over $10 billion, which is roughly 63% of free cash flow. The forward dividend also equals about 63% of fiscal 2026 core EPS of $6.89, so roughly a third of earnings stays in the business as a cushion. Adjusted free cash flow productivity was 100%, meaning reported profits turned fully into cash. The balance sheet holds $9.94 billion in cash against $54.31 billion of shareholders’ equity.

The track record has been tested in bad markets. The quarterly payout rose from $0.40 in 2008 to $0.44 in 2009 during the financial crisis. In 2020 it went from $0.7459 to $0.7907 with the April payment, then rose to $0.8698 in 2021. The latest raise took the quarterly payment from $1.0568 to $1.0885. That makes this the company’s 136th consecutive year of dividend payments.

Bull case: For fiscal 2027, management plans over $10 billion in dividends and approximately $5 billion in buybacks. With a beta of 0.377, the stock has historically moved much less than the broader market, which is the kind of steadiness retirees want. CEO Shailesh Jejurikar said on the fiscal fourth-quarter call that P&G “continued a long-term record of returning high levels of cash to shareholders.”

Caveat: Management expects about $1 billion after tax in higher raw material, energy and transportation costs in fiscal 2027. Its core EPS guidance range is $6.89 to $7.11, so expect the next raise to stay small.

Johnson & Johnson: AAA-Rated Cash Flow Feeding a Growing Payout
Johnson & Johnson (NYSE:JNJ) pays a forward dividend of $5.36 per share. At $255.87, that is a yield of roughly 2.09%, the lowest of the three. The yield has shrunk partly because the stock rose 36.18% over the past year. Existing holders got that gain on top of their income. New buyers get less income per dollar invested.

On coverage, J&J is the most comfortable name in the group. Management reaffirmed full-year free cash flow guidance of approximately $21 billion, including more than $6 billion in the third quarter alone. At the current rate, the dividend costs about $12.9 billion a year, or roughly 62% of that free cash flow. It also equals about 48% of the $11.10 midpoint of adjusted EPS guidance. The company ended the quarter with approximately $17 billion of cash and marketable securities against approximately $45 billion of debt. It is also one of only two U.S.-based companies with a AAA credit rating.

J&J’s most recent raise, from $1.30 to $1.34 a quarter (3.1%), was its 64th consecutive year of increases. It kept raising during the financial crisis, from $0.415 to $0.46 in 2008 and then to $0.49 in 2009. In the middle of the 2020 recession it raised again, from $0.95 to $1.01.

Bull case: The drug portfolio is growing fast enough to fund future raises. DARZALEX sales reached $4.21 billion in the second quarter, up 18.9%, and TREMFYA climbed 72.5%. CFO Joe Wolk lists the dividend among the company’s capital priorities, describing an approach focused on “accelerating future innovation, increasing our annual dividend, and strengthening our pipeline.”

Caveat: Biosimilar competition is eroding STELARA fast. Second-quarter sales were $740 million, down 55.2%, which cut roughly 760 bps from Innovative Medicine growth. Newer drugs have to keep filling that gap.

PepsiCo: Highest Yield in the Group, Backed by Global Snacks
PepsiCo (NASDAQ:PEP) pays the most income of the three. Its annualized dividend of $5.92 per share yields about 4.50% at $131.50. The stock has fallen 10.38% over the past year, so new buyers lock in a higher starting yield than they would have a year ago.

The coverage cushion is thinner than at P&G or J&J. Over the trailing 12 months PepsiCo paid $5.805 per share in dividends against EPS of $7.95, a payout ratio near 73%. Its free cash flow yield of 4.39% is about level with its dividend yield, so cash generation covers the payout with little to spare. The plan for 2026 calls for $7.9B in dividends and only $1.0B in buybacks, which shows the dividend gets paid before buybacks. Debt is manageable, with net debt at 2.31 times EBITDA and interest coverage of 12.03x.

PepsiCo says this year marked its 54th consecutive annual dividend increase, and it has paid quarterly dividends since 1965. The latest raise lifted the quarterly payment from $1.4225 to $1.48. During the financial crisis the payout went from $0.375 to $0.425 in 2008 and to $0.45 in 2009. In 2020 it rose from $0.955 to $1.0225.

Bull case: International growth is carrying the company. Third-quarter revenue rose 5.6% to $25.27B, and operating income jumped 19.4%. Latin America Foods grew 14% and EMEA 8%. CEO Ramon Laguarta said the “international business is becoming a very scaled part of our business and profit accretive.” A company earning more from Lay’s, Doritos and Gatorade outside the U.S. depends less on any single economy.

Caveat: North American snacks are weak. Core operating profit at PepsiCo Foods North America fell 12%, and management cut its 2026 core EPS growth forecast to +2.5% to +3.5%, down from +5–7%. Because coverage is already tight, keep an eye on whether cost cuts restore those margins.

Three Ways to Collect a Paycheck That Keeps Growing
All three companies raised their dividends in 2008, 2009 and 2020, so their records hold up through recessions as well as good years. J&J offers the widest coverage and a AAA balance sheet. P&G pairs the longest streak with free cash flow that grew by double digits last year. PepsiCo pays the highest yield in exchange for a thinner cushion, so the thing to track is whether its North American margins recover. If you want a wider shortlist screened the same way, we ranked ten Dividend Kings by valuation right now in a free report you can grab here.

Contact [email protected] for any questions or corrections.

The problem may be bigger than a few weak brands. Pepsi needs to stop tinkering and consider more fundamental changes.

With support from PepsiCo and the PepsiCo Foundation, the Feed the Children Food & Essentials Hub program has reached a major milestone in helping expand access to nutritious food and essential resources for students and families. 

, /PRNewswire/ -- PepsiCo (NASDAQ: PEP), PepsiCo Foundation and Feed the Children today announced that the Feed the Children Food & Essentials Hub program has provided over 2 million meals served this year, marking a significant milestone in their longstanding work to help address childhood hunger. Through school-based hubs, the program connects students and families with nutritious food, household essentials and educational resources, helping bring critical support directly into the communities where families live and children learn.

The Food & Essentials Hub network continues to bring together Feed the Children and a coalition of supporting partners to help address school hunger and strengthen support for children and families.

With support from PepsiCo and the PepsiCo Foundation, the Feed the Children Food & Essentials Hub program has reached a major milestone in helping expand access to nutritious food and essential resources for students and families.

PepsiCo Foundation The program launched in 2020, when food insecurity among U.S. households with children rose to 14.8%, up from 13.6% in 2019.1

"For many families, access to food isn't the only challenge. Time, transportation and awareness of available resources can all create barriers to getting support when it's needed most," said Monica Bauer, SVP, Social Impact, PepsiCo and President of the PepsiCo Foundation. "That's what makes this model so powerful. By working with Feed the Children to provide food, household essentials and educational resources through local schools, this program helps reach families through institutions they already know and trust. As the program exceeds two million meals delivered, we're seeing how community-based partnerships can help strengthen family stability and support student success."

Today, the Food & Essentials Hub network continues to bring together Feed the Children and a coalition of supporting partners to help address school hunger and strengthen support for children and families.

During the 2025-26 school year, Feed the Children's Food & Essentials Hub network delivered meaningful impact across the country, including:

More than 154,900 students and 58,600 households reached 834 schools engaged across 11 states More than 686,000 meals provided More than $6.7 million in food, essentials, books and school supplies distributed Unlike traditional food distribution programs, the Feed the Children Food & Essentials Hub model goes beyond food assistance, providing families with household and personal care items, school supplies and educational resources through participating schools. By bringing these resources together in one place, the program is designed to help reduce household stress and support children both in and out of the classroom.

The program is making a meaningful difference for participating families and schools, including:

71% of caregivers reported reduced household stress. Nearly two-thirds of caregivers said the program helped reduce the need to cut or skip meals for their children. Concerns about food running out dropped by 17.3 percentage points, with nearly twice as many families reporting they did not worry about food at all. 85% of families said access to household and personal care items helped free up resources for other essential expenses. 87% of participating school districts reported improvements in student confidence and attendance. 83% of students and families said they felt treated with dignity and respect while accessing resources. "When we talk about the true impact of fighting school hunger, we're talking about much more than food. We're talking about helping children arrive at school ready to learn, reducing stress for families, and creating opportunities for children to grow, succeed and thrive," said Emily Callahan, president and CEO of Feed the Children. "Through our long-standing relationship with PepsiCo and the support of partners who make the Feed the Children Food & Essentials Hub program possible, we're helping provide food, essentials and support that strengthen families and communities while advancing our shared vision of a world where no child goes to bed hungry."

The milestone builds on more than three decades of collaboration between PepsiCo and Feed the Children to help expand food, essentials and support for families across the U.S. Together, these organizations continue to invest in community-based solutions that help address immediate needs while supporting long-term well-being for children and families.

About Feed the Children
Feed the Children is a global movement working to end childhood hunger in the U.S. and around the world. Together with communities, the organization provides food, essentials and opportunities to children and families who need them most so every child can survive and thrive. Learn more at feedthechildren.org.

About PepsiCo
PepsiCo products are enjoyed by consumers more than one billion times a day in more than 200 countries and territories around the world. PepsiCo generated nearly $94 billion in net revenue in 2025, driven by a complementary beverage and convenient foods portfolio that includes Lay's, Doritos, Cheetos, Gatorade, Pepsi-Cola, Mountain Dew, Quaker, and SodaStream. PepsiCo's product portfolio includes a wide range of enjoyable foods and drinks, including many iconic brands that generate more than $1 billion each in estimated annual retail sales.

Guiding PepsiCo is our vision to Be the Global Leader in Beverages and Convenient Foods by Winning with pep+ (PepsiCo Positive). pep+ is our strategic end-to-end transformation that places sustainability at the center of our business strategy, seeking to drive growth and build a stronger, more resilient future for PepsiCo and the communities where we operate. For more information, visit www.pepsico.com, and follow on X (Twitter), Instagram, Facebook, and LinkedIn @PepsiCo.

About PepsiCo Foundation
The PepsiCo Foundation, the philanthropic arm of PepsiCo, works to support positive change for people and the planet by expanding access to essential resources that help meet immediate needs and unlock pathways to opportunity. Guided by PepsiCo Positive (pep+), our philanthropic investments focus on four key areas: food access, safe water access, farming, and workforce development. Through collaboration with nonprofits, community organizations and global partners, the Foundation works to strengthen food systems, support farmers, expand access to nutritious food and safe water, and advance workforce development to build lasting economic resilience. Learn more at www.pepsicofoundation.com. Follow us on LinkedIn.

1

 Source: USDA Economic Research Service, 2021.

SOURCE PepsiCo, Inc.

As more people switch to Coke, some analysts are getting more worried about the state of archrival Pepsi.

Chicken chain's plan for new a beverage partner would deal a blow to PepsiCo's U.S. business.

PepsiCo Today

$127.30 +0.62 (+0.49%)

As of 10/13/2026 04:00 PM Eastern

$123.47▼

$171.484.65%

15.99

$145.50

Investors are taking note of PepsiCo Inc. NASDAQ: PEP as the food and beverage leader trades below 16x earnings, one of its lowest valuations historically, and following a Q3 2026 earnings report with a number of highlights. Still, with the outlook for the near future looking less than optimistic, the company's real appeal may be to long-term investors who can settle in with a 4.67% dividend yield and wait for shares to capture some of the roughly 15% in upside potential Wall Street has assigned to the stock.

PepsiCo's recent earnings emphasize the distinction between generating sales growth and turning that growth into sustainable profits—not to mention highlighting concerns about pricing power and consumer affordability. The company must carefully balance its margins against a tepid recovery in the North American market, all while also dealing with continued strength from major rival Coca-Cola Co. NYSE: KO and a broader K-shaped economy that is challenging retailers across the board.

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PepsiCo Earnings Deliver Mixed SignalsPepsiCo had several important wins for the latest quarter, including better-than-expected revenue and adjusted earnings per share (EPS). Revenue growth of 5.6% year over year (YOY) brought sales above analyst expectations of nearly $25 billion, while adjusted EPS came in five cents above predictions. These figures mask a more modest 2% increase in core EPS, however.

A surprising divergence in PepsiCo's report was its sales and earnings guidance going forward. The company predicts about 3% organic revenue growth and between 2.5% and 3.5% in adjusted EPS growth for the full year, down from a 5-7% earnings growth target previously.

Investors' concern is that, despite rising sales, PepsiCo may not be able to offset rising costs and weaker domestic performance.

Blame It on the North American Market?PepsiCo MarketRank™ Stock Analysis4.670809095715 of 5 stars

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North American consumers, a core component of PepsiCo's market, are maintaining or even reducing their purchases. Last quarter, North American food volumes were flat YOY, while beverage volumes actually fell by 2% over the same period. The company's Asia-Pacific region saw a strong 11% food growth YOY, by comparison.

The company is being forced to lean more heavily on international sales while domestic recovery is slow, and lower prices on many Lay's and Doritos products have not been a quick fix to the problem.

By reducing prices, PepsiCo may be able to restore some of the lost volume momentum, but it will damage the company's revenue per unit sold and hurt margins. Last quarter, operating margins narrowed by 35 basis points, reflecting this pressure.

PepsiCo's Strengths Against Coca-Cola'sPepsiCo certainly still has many strengths, with its international operations being a notable one. The fact that the company offers convenient foods, sports drinks, energy beverages, and more on top of traditional soft drinks means that it can appeal to a broader market than a beverage-only competitor like Coca-Cola.

Investors will have to wait to directly compare Coca-Cola's Q3 2026 earnings against PepsiCo's, but the rival has a strong operating profile, including recent global volume and organic revenue growth as well as an expanding operating margin. In contrast to PepsiCo's caution regarding full-year guidance, Coca-Cola has recently boosted its outlook for the year and anticipates up to 10% YOY comparable EPS growth.

Coca-Cola's structure—focused on drink concentrates and a franchised bottling system—may support higher margins and stability when prices increase compared to PepsiCo. On the other hand, if domestic volumes improve for PepsiCo, and particularly if international sales remain strong, the company could impress in future earnings reports.

The Broader Retail Environment and What to WatchRecent earnings across retail have suggested that a K-shaped economy is in place, with higher-end and luxury stores doing surprisingly well even as others are struggling.

When wallets are stretched, consumers may keep buying necessities but are more likely to trade down to less expensive brands or to reduce their overall volume. PepsiCo can win in this environment, as its products are often regular purchases for many customers, and their prices remain low overall compared to many other products. Still, there is always a risk that even loyal customers will switch to other options that can save money.

It will be helpful for investors to watch PepsiCo's unit volumes and capacity to grow revenue by means other than simply raising prices. If the company manages to boost sales without sacrificing too much revenue per unit, it may be able to get out of a rut and distinguish itself from its biggest rival.

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PepsiCo (PEP +0.24%) has been a top dividend stock to own for decades. It's been growing its payout and offering investors some great value. But the business hasn't been in great shape of late, and recently it cut its guidance.

Its yield is fairly high at around 4.7%, as the stock has fallen by more than 15% in the past 12 months. With the company facing some greater adversity these days, can investors still depend on its dividend for the long haul, or is it in danger of being cut?

Image source: Getty Images.

The company is facing challengesPepsiCo's business has been growing this year, but it has been at a fairly modest rate. Revenue in its most recent quarter, which ended on Sept. 5, totaled $25.3 billion and was up nearly 6% year over year. But organically, its top line grew by just 3%. Its core earnings per share (EPS) also only rose by a modest 2%.

The company was previously expecting between 5% to 7% growth in core EPS for the full year, but has now reduced that to a range of 2.5% to 3.5%.

With the business making investments into its operations to improve performance and strengthen its future growth, that can adversely impact cash flow, which in turn, may put pressure on the company's dividend.

PepsiCo raised its dividend again this yearIn May, PepsiCo announced a 4% increase to its dividend, boosting it to $1.48 per share each quarter, or $5.92 over the course of a full year. Currently, its payout ratio is at around 70%, which is a healthy rate, suggesting that not only is the dividend safe, but there is room for more increases in the future, even if its growth rate is modest.

PepsiCo is a Dividend King, as it has raised its dividend for 54 consecutive years. While that kind of track record does suggest safety, past performance is not a predictor of the future, and things can change. The good news for investors is that even amid adversity, the dividend still looks safe right now.

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Is PepsiCo stock a bargain buy right now?As a result of the decline in its share price, investors can buy PepsiCo's stock at a discount right now. It's currently trading at a forward price-to-earnings multiple of just under 15, which is based on analyst expectations of how it will do in the year ahead. That's far below the S&P 500 average of 20.

For income investors, this can be a potentially underrated dividend stock to buy right now, with PepsiCo having a tremendous track record for dividend growth. Its business is facing challenges, but it is still growing. As a long-term investment, PepsiCo could make for a good buy today.

Coca-Cola (KO +1.98%) and PepsiCo (PEP +0.56%) have battled for dominance for decades. Deciding which of these dividend titans to buy in 2026 requires a close look at their diverging business models.

While both companies own world-class brands, Coca-Cola focuses almost exclusively on drinks and concentrates. In contrast, PepsiCo is a massive food and snack company that also sells soda. This comparison explores how their different approaches to the consumer market impact investor returns.

The case for Coca-ColaThe Coca-Cola Company is a total beverage company that sells brands such as sparkling soft drinks, water, and coffee across more than 200 countries. It represents one of the largest beverage stocks in the market and relies on independent bottlers such as Coca-Cola Europacific Partners (CCEP +0.80%). Customer concentration like this adds a layer of risk since one unnamed bottling partner accounted for 10% of revenue in 2025.

In FY 2025, revenue reached nearly $47.9 billion, representing growth of approximately 1.9% over the prior year. Net income for the period was roughly $13.1 billion, marking a significant increase from the $10.6 billion reported in 2024. This reflects a net margin of approximately 27.3%, a key metric that measures how much profit a company retains from its total sales after paying all expenses.

As of its December 2025 balance sheet, the debt-to-equity ratio is roughly 1.5x, indicating the relationship between borrowed money and shareholders' equity. The current ratio, which measures the ability to pay short-term debts with assets that can be quickly converted to cash, is approximately 1.5x. Free cash flow, which is cash from operations minus capital expenditures, reached nearly $5.3 billion during the year.

The case for PepsiCoIn its latest annual report, filed for the fiscal year 2025, PepsiCo described a diverse portfolio of foods and drinks consumed in over 200 countries. The company distributes products through various warehouse networks and often collaborates with partners like Starbucks (SBUX +1.69%) for specialized offerings. A significant customer is Walmart (WMT +1.14%), which accounted for approximately 14% of revenue in 2025, and customer concentration like this adds a layer of risk to the business.

In FY 2025, revenue reached nearly $93.9 billion, representing growth of roughly 2.3% over the previous fiscal year. This continued the steady upward trend from 2024, when revenue was roughly $91.9 billion. Despite high sales, net income for the period was approximately $8.2 billion, resulting in a net margin of nearly 8.8%.

As of its December 2025 balance sheet, the debt-to-equity ratio is approximately 2.4x, representing the relationship between total debt and shareholders' equity. The current ratio stands at roughly 0.9x, a metric that measures the ability to pay short-term debts with assets such as cash and inventory. Free cash flow, defined as cash from operations minus capital expenditures, was nearly $7.7 billion for the year.

Risk profile comparisonIn its latest annual report for FY 2025, Coca-Cola noted risks related to revenue concentration and heavy dependence on independent bottling partners. Commodity price volatility for items such as sweeteners and aluminum packaging could also affect costs amid geopolitical tensions. Additionally, the company manages complex regulatory risks related to global tax laws and environmental regulations governing plastic use.

PepsiCo carries risk from its heavy retail concentration, particularly its reliance on Walmart for nearly 14% of sales. The company is also exposed to price fluctuations in ingredients such as grains and potatoes. Furthermore, Keurig Dr Pepper (KDP +0.56%) and other rivals compete in a market increasingly sensitive to sugar and sodium regulations.

Valuation comparisonPepsiCo appears cheaper than Coca-Cola based on its Forward P/E relative to future earnings estimates and its P/S ratio based on sales over the past twelve months.

MetricCoca-ColaPepsiCoForward P/E26.6x15.0xP/S ratio7.6x1.8xValuation metrics include those sourced from Financial Modeling Prep (FMP) and may differ from those of other data providers.

When comparing Coca-Cola and PepsiCo, investors should consider a few key factors. Let's have a look at them and see what that tells us about each stock.

To start, there's profitability. On this front, Coca-Cola has the edge. Over the last five years, its operating margin has averaged 26.5%, while Pepsi's has been 14.9%. What's more, in recent quarters, this gap has widened. Coca-Cola's operating margin now stands at an all-time high of 31.9%, well ahead of Pepsi's 15.8%.

Another factor to consider is each company's valuation. Here, Pepsi can claim an advantage. On a forward price-to-earnings (P/E) basis, Pepsi stock, with its multiple of 15x, is significantly more affordable compared to Coca-Cola stock, with its 27x multiple.

Last, there are dividends. This factor is particularly important for income-oriented investors who may be choosing between these two stocks. Pepsi boasts a very strong dividend yield of around 4.6%. Coca-Cola, by contrast, has a dividend yield of 2.4%.

In summary, both stocks are worthy of consideration and show good profitability, reasonable valuation, and solid dividend yields. However, there is one other factor investors may wish to consider: historical performance. Over the last five years, Coca-Cola stock has generated a total return of 92%, while Pepsi has delivered a total return of -5%. Commodity price pressures have hurt Pepsi, while Coca-Cola's asset-light model has largely insulated it from rising costs. Given ongoing macroeconomic pressures, some investors may elect to stick with Coca-Cola.

SummaryPepsiCo, Inc. is rated Hold at $126, trading near the fair value of $124 with a 4.6% yield.North American volumes are weak, Frito-Lay is sacrificing margin, and GLP-1 drugs pose long-term demand risks.Cash conversion is improving, international growth is strong, but acquisition spending and $41 billion in net debt remain concerns.I would only consider buying PepsiCo below $110 to ensure a margin of safety; covered calls are suggested for current holders. Getty Images

PepsiCo, Inc. (PEP) finally looks cheap. The stock is around $126, down close to 30% from its 2023 highs. That's a pretty brutal drawdown for a blue chip, especially during the middle of one of the strongest bull markets of all time. It

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Key Takeaways PEP is expanding its wellness portfolio with zero-sugar drinks, functional hydration and protein-rich snacks.The permissible snacking portfolio generates roughly $3B in sales and is growing at a near-double-digit rate.PepsiCo is expanding functional beverages and better-for-you snacks to capitalize on growing wellness demand. PepsiCo, Inc. (PEP - Free Report) is strengthening its functional food and beverage portfolio to capitalize on growing consumer demand for healthier and more nutritious choices. With wellness increasingly influencing purchasing decisions, the company is expanding beyond traditional offerings to introduce products that support active lifestyles and evolving dietary preferences. PepsiCo's focus on zero-sugar beverages, functional hydration, protein-rich snacks and portion-controlled products reflects its efforts to capture emerging consumption trends. These initiatives are helping the company diversify its portfolio while addressing the growing preference for convenient products with added nutritional benefits.

PepsiCo's beverage transformation is gaining traction, supported by encouraging momentum in zero-sugar offerings, functional hydration and energy drinks. The company is also strengthening its presence in emerging beverage categories through brands like poppi and partnerships involving CELSIUS and Alani Nu. poppi has resumed growth at a healthy pace following improvements in distribution integration, allowing PepsiCo to expand consumption opportunities and customer reach. Meanwhile, the food business is benefiting from increasing interest in permissible snacking. This portfolio has reached approximately $3 billion in sales and is growing at a nearly double-digit rate. PepsiCo is also scaling innovations such as Doritos Protein and Naked, alongside portion-controlled multipacks and variety packs, to address evolving consumer preferences.

The expansion of functional and better-for-you offerings provides PepsiCo with opportunities to attract health-conscious consumers while broadening consumption occasions across food and beverage categories. Continued innovation, stronger distribution and increased product availability could help the company capitalize on demand for products that combine convenience with nutritional benefits. However, sustaining momentum will depend on consumer acceptance, competitive differentiation and the ability to scale newer offerings effectively. With wellness increasingly influencing purchasing decisions, PepsiCo's diversified portfolio and expanding presence in functional categories could support greater participation in this evolving market.

How Are KDP and KO Capitalizing on Rising Functional Beverage Demand?Keurig Dr Pepper Inc. (KDP - Free Report) and The Coca-Cola Company (KO - Free Report) are expanding their functional beverage portfolios through energy, hydration and zero-sugar innovations to capitalize on growing wellness-driven consumer demand.

Keurig Dr Pepper is strengthening its position in the functional beverage market by expanding its energy, hydration and better-for-you offerings. The company's focus on GHOST Energy, C4 Energy and Bloom Sparkling Energy reflects its efforts to address growing consumer demand for beverages that support active lifestyles and provide functional benefits. KDP is also expanding its hydration portfolio through Electrolit, introducing new flavors and convenient packaging formats to attract health-conscious consumers. The strategy is gaining traction, with energy, water and sports hydration contributing to growth in the U.S. Refreshment Beverages segment during the second quarter of 2026.

Coca-Cola is expanding its functional beverage portfolio to capitalize on rising demand for healthier hydration and nutritional benefits. The company's focus on BODYARMOR, Powerade and zero-sugar beverages reflects its efforts to address changing consumer preferences. Coca-Cola is introducing innovations such as BODYARMOR FIT, a sparkling sports drink combining zero sugar, electrolytes and caffeine with metabolism-supporting functionality. Meanwhile, Powerade registered 8% volume growth in the second quarter of 2026, supported partly by the company's FIFA World Cup campaign. Coca-Cola is also expanding Coca-Cola Zero Zero into additional international markets following encouraging consumer acceptance in Europe.

PEP’s Price Performance, Valuation & EstimatesShares of PepsiCo have lost 9.1% in the past three months compared with the industry’s fall of 0.5%.

Image Source: Zacks Investment Research

From a valuation standpoint, PEP trades at a forward price-to-earnings ratio of 14.52X, below the industry’s average of 18.99X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for PEP’s 2026 and 2027 earnings implies year-over-year growth of 4.2% and 3.3%, respectively. The company’s EPS estimates for 2026 and 2027 have moved southward in the past seven days.

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PEP stock currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Key Takeaways PepsiCo lowers its 2026 core EPS growth outlook to 2.5%-3.5% amid rising costs and weaker margins. International organic revenues rise 8%, with operating margins expanding 105 basis points in Q3. PEP eyes North American recovery through snack pricing resets, higher brand spending & distribution changes. PepsiCo, Inc. (PEP - Free Report) emphasized accelerating revenue growth and restoring North American competitiveness during its third-quarter 2026 earnings call, even as rising input costs prompted management to lower its earnings outlook.

Executives highlighted strong international momentum, improving snack volumes and continued brand investment. However, weaker beverage execution and rising margin pressures remained central concerns during analyst discussions.

PEP Lowers Earnings Outlook Despite Revenue MomentumPepsiCo now expects 2026 core EPS growth of 2.5% to 3.5%, down from its previous expectation at the low end of 5% to 7%. Core constant-currency EPS growth is projected at 1% to 2%.

The company expects approximately 6% net revenue growth and 3% organic revenue growth for the year.

Executive vice president and CFO Stephen Schmitt attributed the earnings revision primarily to weaker-than-expected margins, higher input costs and unfavorable product mix. Management maintained planned growth investments despite these pressures.

PepsiCo Faces Rising Costs as Commodity Hedges ExpireDuring questioning from Barclays, Schmitt explained that PepsiCo's six- to 12-month commodity hedging programs had helped contain inflation, but expiring hedges were exposing the business to higher costs.

Management also identified the expiration of tariff-related benefits in North American beverages as another source of pressure.

Schmitt said structural cost reductions and revenue management actions would help mitigate inflation. Additional benefits are expected as the company enters 2027, although detailed guidance will follow in February.

PEP's International Business Sustains Strong GrowthChairman and CEO Ramon Laguarta described international growth as increasingly structural, supported by stronger competitive positioning across markets rather than temporary demand factors.

International organic revenues increased 8% during the quarter, while operating margin expanded 105 basis points. International operations represented 45% of year-to-date profit.

Laguarta emphasized broad-based strength across Europe, the Middle East, Asia and Latin America. Management intends to sustain investments in these markets while improving North American performance.

PepsiCo's Snack Pricing Reset Supports Volume RecoveryLaguarta said North American snacks benefited from affordability initiatives and pricing adjustments, shifting from low-single-digit volume declines last year to low-single-digit growth.

During Goldman Sachs' questioning, management highlighted portion-controlled products and permissible snacking as important growth platforms. Each represents more than $3 billion in business.

The company is supporting products such as Doritos Protein while expanding investments behind existing brands. Laguarta acknowledged that volume gains remained below initial expectations, citing consumer conditions and execution challenges.

PEP Targets Soft Drink Weakness With Greater InvestmentNorth American beverages remained a major focus of analyst scrutiny. Laguarta acknowledged underperformance in carbonated soft drinks despite stronger execution in hydration and energy categories.

Management plans additional investment behind Pepsi, Mountain Dew and Poppi while strengthening retail execution. Laguarta also highlighted Gatorade, Propel and the combined opportunities involving Celsius and Alani.

The company increased advertising and marketing spending at double-digit rates across its U.S. businesses during the quarter. A partnership with Publicis is intended to improve targeting and marketing returns.

PepsiCo Reviews Distribution and Operating StructuresDuring BNP Paribas' questioning, Laguarta indicated that management was evaluating broader structural alternatives, including potential beverage refranchising in selected U.S. markets.

PepsiCo is also advancing its One North America integration initiative, combining elements of food and beverage distribution infrastructure where operational benefits justify the approach.

Management favors geographically tailored solutions rather than a uniform distribution model. Laguarta emphasized execution, cost efficiency and stronger marketplace competitiveness as priorities.

PEP Maintains Growth Focus Amid Margin ConstraintsPepsiCo reported core EPS of $2.34, exceeding the Zacks Consensus Estimate of $2.29. Revenues of $25.27 billion surpassed the $24.88 billion consensus estimate.

Management's message emphasized preserving revenue momentum while addressing cost pressures and underperformance in North America.

Executives remain focused on reinvestment, structural productivity and portfolio development, with more clarity on 2027 expectations scheduled for February.

PepsiCo's Zacks Rank and Style Scores Signal CautionPepsiCo currently carries a Zacks Rank #4 (Sell), indicating an unfavorable near-term earnings estimate revision trend. Its Value, Growth and VGM Score of C reflect middle-range characteristics, while its Momentum Score of F indicates particularly weak price momentum characteristics.

The combination falls outside the preferred Zacks Rank #1 (Strong Buy) or #2 (Buy) stocks with A or B Style Scores. However, the Zacks Rank can change as analysts revise earnings estimates following the latest results. You can see the complete list of today’s Zacks #1 Rank stocks here.

PepsiCo has cratered while every major beverage rival rallied, and now Goldman Sachs sees a 40% rebound ahead. But that call rests on three pillars, and one is already showing serious cracks.

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PepsiCo (NASDAQ:PEP | PEP Price Prediction) trades at $128.34, and analysts’ consensus target sits at $148.64. That works out to about 15.8% of implied upside.

PepsiCo owns Lay’s, Doritos, Gatorade, Pepsi and Mountain Dew. Goldman Sachs analyst Bonnie Herzog set a target of $180.00, meaning roughly 40.3% upside from current levels.

Frito-Lay’s Profit Slide and a Guidance Cut Sent Shares 22.9% Below Their 52-Week High The biggest problem is North American snacks. Core operating profit at Frito-Lay North America fell 12% in the third quarter, and segment revenue stayed flat at $6.504B. The stock slipped all year. It was $155.28 around the first-quarter report, $143.30 at the second and $123.74 going into the third. It now sits 22.9% below its 52-week high of $166.41.

Management cut its 2026 outlook for core constant-currency EPS growth to +1% to +2%, down from +4% to +6%, citing rising input costs. Core operating margin contracted 35 bps. Leadership said “the consumer is worse than what we had anticipated and driven mainly by gas prices.”

The quarter itself beat expectations. EPS was $2.34 against a $2.2964 estimate, and revenue was $25.27B. Shares rose 3.73% on the report despite the guidance cut.

Goldman’s $180 Target Rests on Three Pillars, and One Is Cracking Herzog’s first pillar is pricing power at Frito-Lay, assuming PepsiCo can pass through input cost inflation without structural volume decay. The 12% profit drop strains this assumption. Management argues value spending is working: “A category that was negative in volume now is positive in volume.”

The second pillar, international growth, is holding up. Organic growth reached +9% in both EMEA and Asia Pacific, and Latin America Foods revenue rose 14%. Management expects the international business to “cross $40 billion in this year.”

The third pillar is productivity. Per the CEO, “additional structural cost reduction actions are being identified and will be implemented in the coming months.” management expects better Q4 profit performance than Q3, making the next earnings report the first test.

Goldman is an outlier. The Street counts two Strong Buys, three Buys, 18 Holds and one Sell. The 2026 EPS consensus has had 18 downward revisions in 30 days, falling from 8.6388 to 8.5536. The fourth-quarter estimate drew 12 upward revisions in the past week.

Coca-Cola, Monster and Keurig Dr Pepper Rallied While PepsiCo Sank PepsiCo fell on its own. Its beverage peers rallied this year.

Coca-Cola (NYSE:KO) is up 28% year to date at $87.76, with an average target of $94.43 meaning 7.6% upside.

Monster Beverage (NASDAQ:MNST) has gained 13.86% to $43.65, with a target of $50.02 meaning 14.6% upside.

Keurig Dr Pepper (NASDAQ:KDP) is up 15.13% to $31.26, with a target of $36.21 meaning 15.8% upside and no Sell ratings.

On consensus targets, Keurig Dr Pepper and PepsiCo offer similar upside. Goldman’s $180 call is the largest estimate in the group. PepsiCo’s gap exists because its price fell while peers rose.

PepsiCo Trails the S&P 500 by More Than 20 Points This Year PepsiCo is down 7.86% year to date and 7.3% over the past month. The S&P 500 is up 13.5% year to date. Across 24 analysts, the average target of $148.64 meaning 15.8% upside from $128.34.

The valuation is modest at about 15x forward earnings. The dividend yields 4.36% after the company’s 54th consecutive annual increase, which brought the annual payout to $5.92 per share. That 54-year streak puts PepsiCo firmly in Dividend King territory, and we ranked our ten favorites in the club by valuation in a free report here.

A 4% Dividend Yield Meets a $180 Target That Needs a Frito-Lay Turnaround The thesis improves if Frito-Lay’s volume gains turn into profit growth and the new cost cuts bring back margin expansion over the next few quarters. The downside risk grows if input inflation keeps pushing guidance lower and earnings estimates keep falling. In that case, a 15x multiple could just be the new normal.

The setup looks modestly constructive. Getting to Goldman’s $180 requires all three assumptions to hold at once, and the Frito-Lay pillar is clearly weakening. A move toward the $148.64 consensus is more realistic. The yield above 4% provides income while management works to prove the recovery.

Contact [email protected] for any questions or corrections.