PepsiCo (PEP) Stock Price Target Cut Ahead of Possible Price Hikes

TLDR

• PepsiCo shares fell about 0.5% after Bloomberg reported plans to raise prices on chips and soda.
• The move reverses earlier price cuts that failed to boost sales this year.
• Doritos, Ruffles and SunChips are among the brands facing higher prices.
• Increases are expected in late 2026 or early 2027, at low-to-mid single digit percentages.
• Citigroup cut its price target on PEP to $142 from $145, still implying about 9% upside.

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PepsiCo stock slipped roughly 0.5% on Thursday after Bloomberg reported the snack and beverage giant is preparing to raise prices again. The stock opened at $130.18, well below its 52-week high of $171.48.

PepsiCo, Inc., PEP

The report says PepsiCo plans to hike prices on grocery-store-sized bags of chips, including Doritos and Ruffles. SunChips and other brands are also expected to see increases.

Here’s the twist. These are the same products PepsiCo cut prices on earlier this year in an affordability push.

That strategy didn’t work as hoped. Sales failed to pick up despite the lower prices, according to people familiar with the plans cited by Bloomberg.

Now the company is walking some of that back. A PepsiCo spokesperson said the price increases will be in the low-to-mid single digits, roughly in line with inflation.

What PepsiCo Is Saying

The spokesperson was careful to note the new prices will still sit below where they were before this year’s cuts. PepsiCo says it remains committed to its broader affordability effort even as certain items get pricier.

Timing-wise, the increases are expected to land at the end of this year or in early 2027. That gives the company a few more months to figure out its next move on pricing.

The reversal shows how tricky it is for consumer goods companies right now. They’re stuck between rising input costs and shoppers who are watching every dollar.

Wall Street’s Take

Citigroup trimmed its price target on PepsiCo to $142 from $145 on Thursday, while keeping a neutral rating. That target still points to about 9% upside from current levels.

Citigroup isn’t alone in playing it cautious. The stock carries a consensus “Hold” rating, with seven analysts at Buy, twelve at Hold and one at Sell. The average price target sits at $156.65.

Other recent moves include TD Cowen and Weiss Ratings both reiterating Hold ratings in the last two months. Bank of America cut its target to $164 from $173 back in June.

PepsiCo’s last earnings report, released July 9, actually beat estimates. The company posted $2.20 in EPS against a $2.19 consensus, with revenue of $24.18 billion versus $23.95 billion expected.

Revenue was up 6.4% year over year. PepsiCo has guided for full-year EPS between $8.55 and $8.71, and analysts are penciling in $8.57.

Options traders have been active too. Investors bought 48,807 call options recently, about 62% above the average volume, a signal some read as a bet on a rebound.

On the ownership side, EVP David Flavell sold 2,900 shares in late July at an average price of $139.54, a transaction worth just over $404,000. That trimmed his stake by roughly 3.7%.

Institutional investors continue to hold the bulk of the company, owning about 73% of shares outstanding. PepsiCo also confirmed this week it is reaffirming its investment commitments in Saudi Arabia as part of its international operations.