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

PepsiCo, Inc. (NASDAQ:PEP) is included among the 12 Best Stocks to Buy for the Long Term.

On January 16, BNP Paribas raised its rating on PepsiCo, Inc. (NASDAQ:PEP) to Outperform from Neutral. It set a $179 price target on the stock. The firm also lifted its FY27 EPS forecast by roughly 5%, arguing that recent activist involvement creates a “win-win” situation for the company, according to the analyst.

PepsiCo’s shares are down nearly 1.5% over the past 12 months, reflecting a tough operating backdrop. Demand has softened as consumers lean more toward health and wellness, while higher living costs, rising production expenses, and tariffs have added pressure. Management is guiding for low single-digit organic revenue growth in full-year 2025 and flat core EPS on a constant currency basis. While recent results have been weak, much of that disappointment already appears baked into the stock. The snack segment, in particular, has been hit as health trends intensify and the use of weight-loss drugs such as Ozempic becomes more widespread.

Because of its exposure to restaurants, PepsiCo remains tied to discretionary consumer spending. Even so, the strength of its brand portfolio has allowed the company to push through price increases during inflationary periods.

That said, tariffs and changing consumption habits have weighed on profitability. Through the first three quarters of 2025, organic revenue increased 1.5%, while core EPS declined 3.5%. The company has also leaned on acquisitions to drive growth. PepsiCo bought SodaStream in 2018, giving it a strong foothold in the at-home soda category. That was followed by the acquisition of Rockstar Energy in 2020. More recently, in early 2025, PepsiCo added Siete Foods, known for its grain-free tortillas and Mexican-American offerings, along with Poppi, a fast-growing prebiotic soda brand.

PepsiCo, Inc. (NASDAQ:PEP) is far more diversified than its flagship cola might suggest. Alongside its beverage lineup, the company owns Frito-Lay and Quaker and controls well-known drink brands such as Mountain Dew and Gatorade, giving it a broad presence across both snacks and beverages.

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