J.P. Morgan cuts PepsiCo target by 19% to $138

J.P. Morgan analyst Andrea Teixeira downgraded PepsiCo to Neutral from Overweight on Tuesday, Sept. 29, 2026. The bank cut its price target on the stock by 19% to $138, warning that earnings expectations may still need to fall. Shares of PepsiCo fell more than 1% following the downgrade.

The downgrade centers on persistent weakness in North America, especially in the snack business. Teixeira noted that price cuts, new packaging, and ingredient changes have not generated a meaningful sales improvement at Frito-Lay North America. The broader recovery at PepsiCo Foods North America appears to have stalled after the first quarter, leaving results dependent on wider economic conditions rather than company initiatives.

International markets have performed better due to favorable weather and the FIFA World Cup, but J.P. Morgan views these benefits as temporary tailwinds. The bank reduced its fiscal 2027 EPS estimate to $8.86 from $9.05, and lowered its fiscal 2028 forecast to $9.33 from $9.57. Teixeira noted that PepsiCo trades at roughly 15 times earnings, in line with peers, which could provide valuation support.

PepsiCo reports third-quarter financial results before markets open on Oct. 8. For the quarter, J.P. Morgan reduced its organic sales growth forecast to 2.8% from 3.2%, and trimmed its EPS estimate to $2.29 from $2.31.