Beverage and snack maker PepsiCo (PEP) is taking a cautious approach to the next 12 months due to concerns over tariffs and intense competition. CEO Ramon Laguarta told Yahoo Finance that the company is “not immune” to the impact of tariffs, although it’s less affected than most other businesses. In fact, the company sources aluminum and oats from Canada, but most of its food inputs are localized, which provides it with some flexibility to handle these challenges.
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Unsurprisingly, the recent tariffs imposed by President Trump on Mexico, Canada, and China have created uncertainty. While the tariffs on Mexico and Canada were temporarily delayed, PepsiCo’s shares are still down in today’s trading due to the company’s muted growth outlook for 2025. Indeed, Laguarta emphasized the need for conservative guidance thanks to the ongoing geopolitical tensions and higher costs of doing business.
As a result, analysts are concerned about the company’s growth prospects, with Evercore analyst Robert Ottenstein noting that maintaining a 20x multiple will be challenging without some growth in the U.S. Although Wall Street still has a relatively optimistic view of PepsiCo’s business, investors should be prepared for potential cuts to ratings and price targets.
Is PEP Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for PepsiCo is Moderate Buy based on four Buys and six Holds assigned during the past three months. With that comes an average PEP stock price target of $167.90 per share, which equates to 16.6% upside potential from current levels. However, these ratings and price targets will likely change as analysts update their coverage after this morning’s earnings report.
