JPMorgan downgraded PepsiCo (PEP) from Overweight to Neutral, citing a stalled turnaround in the company’s North American business. The bank cut its price target from $170 to $138, a 19% reduction. Analyst Andrea Teixeira led the downgrade.
JPMorgan said Frito-Lay’s salty snacks business has underperformed despite packaging changes and ingredient reformulations. The move follows a similar downgrade from Deutsche Bank and comes ahead of PepsiCo’s October 8 earnings report.
The bank said temporary international tailwinds, including the FIFA World Cup, are masking persistent weakness in PepsiCo’s core domestic market. It lowered its earnings-per-share estimates for 2027 and 2028 and expects the company to rely more heavily on productivity savings to meet its guidance.