A Tale of Two Views: PepsiCo’s Stock Caught Between Analyst Praise and Institutional Selling

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PepsiCo shares are currently presenting a puzzle for the market, caught between bullish analyst upgrades and a notable pullback by some major investors. This divergence in sentiment comes despite the company reporting fundamentally solid quarterly earnings, leaving market participants to weigh conflicting signals about the stock's trajectory.

Operationally, PepsiCo's latest performance provided a sturdy foundation. For the third quarter, the company posted earnings per share of $2.29 and revenue of $23.94 billion, both figures modestly exceeding market forecasts. The net margin remained steady at 7.82%, while the return on equity continues to impress at over 57%.

For income-focused shareholders, the dividend remains a key attraction. The annual payout of $5.69 per share currently offers an attractive yield of 4.0%. Investors are advised, however, to monitor the payout ratio, which currently stands at approximately 108%, a level that requires observation for long-term sustainability.

Wall Street's Bullish December Upgrades

A wave of optimism from major investment banks defined the narrative in December. The shift began on December 10th, when JPMorgan analyst Andrea Teixeira upgraded PepsiCo stock from "Neutral" to "Overweight." In tandem with this rating change, the firm raised its price target from $151 to $164 per share. This revised outlook is predicated on PepsiCo's accelerated innovation strategy and increased marketing investments, which are expected to drive stronger shareholder returns beginning in 2026.

Citigroup followed suit on December 17th, lifting its price objective to $170. Despite noting a broader sector rotation toward household and personal care products, the bank pointed to PepsiCo's improving fundamental metrics. From the current trading level around $144, these analyst targets imply a potential upside of roughly 14% to 18%.

Institutional Investors Take a Different Stance

In stark contrast to the upbeat analyst commentary, recent regulatory filings reveal a different trend among some professional money managers. Data confirms that Boston Trust Walden Corp significantly reduced its stake in PepsiCo during the third quarter. The firm sold over 170,000 shares, trimming its position by approximately 23.1%.

This selling activity from a long-term oriented institution carries considerable weight and acts as a counterbalance to the buy recommendations from Wall Street. It may help explain why the share price has recently exhibited more of a sideways trend, currently at $144.24, despite the positive analyst notes.

The Path Forward

PepsiCo stock finds itself in a tug-of-war between near-term selling pressure from institutions and the longer-term growth narrative championed by analysts. The upcoming dividend payment on January 6, 2026, is likely to provide some short-term support for the share price. Ultimately, the stock's ability to bridge the gap toward the $170 price target will largely depend on the successful execution of its productivity goals in the upcoming fiscal year.