PepsiCo (PEP – Research Report), the Consumer Defensive sector company, was revisited by a Wall Street analyst yesterday. Analyst Dara Mohsenian from Morgan Stanley maintained a Hold rating on the stock and has a $168.00 price target.
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Dara Mohsenian’s rating is based on a combination of factors that highlight both strengths and challenges for PepsiCo. The company’s Q4 results were mixed, with overall segment growth (OSG) being low and North America experiencing particular softness. This was somewhat offset by stronger international performance, especially in the AMESA region. However, the operating profit fell short of expectations, despite a slight EPS beat due to tax benefits.
Looking forward, the guidance for fiscal year 2025 appears weaker than anticipated, with low single-digit OSG and only modest EPS growth. This suggests limited capability for PepsiCo to counteract ongoing OSG challenges. Despite the stock’s recent decline, it seems valued appropriately given these topline pressures, aligning with trends seen across consumer packaged goods peers. As a result, Mohsenian has adjusted the EPS estimates downward and provided a Hold rating, reflecting the current valuation relative to growth prospects.
In another report released on January 29, RBC Capital also assigned a Hold rating to the stock with a $172.00 price target.