Dara Mohsenian, an analyst from Morgan Stanley, maintained the Hold rating on PepsiCo. The associated price target remains the same with $165.00.
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Dara Mohsenian has given his Hold rating due to a combination of factors impacting PepsiCo’s current performance and future outlook. Despite some positive developments, such as expected robust EPS growth in the fourth quarter driven by productivity improvements and favorable foreign exchange conditions, there are ongoing challenges. These include weak trends in the US snacks category and market share pressures in key segments like FLNA and PBNA.
Furthermore, while PepsiCo is optimistic about its long-term productivity enhancements through IT system upgrades and increased automation, the company faces near-term hurdles. These include limited gross margin leverage until stronger topline growth is achieved and a need for higher investment following anticipated marketing cutbacks. Additionally, the projected operating sales growth remains below long-term trends, contributing to a cautious outlook.
In another report released on October 10, Wells Fargo also maintained a Hold rating on the stock with a $154.00 price target.