There were those who believed that the rise of GLP-1 drugs would hit the sales of snack foods hard. There were also those who believed that worsening economic conditions would do likewise. And with word that beverage giant PepsiCo (PEP) shut down its last Chicago plant recently, the belief might be truer than expected. The shutdown proved little help to shares, though, as PepsiCo stock dropped modestly in Tuesday afternoon’s trading.
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The PepsiCo plant in Chicago shut its doors on Monday, with employees basically getting notice at about 5:45 that morning of the closure. One PepsiCo employee, Daryl Smith, reported that there was a “high presence of security” at the site, and it turned out there was a reason: the plant was about to be closed. As to why PepsiCo shuttered the plant, the reports noted that it was “an old plant,” which had “…a lot of work that needs to be done to it.”
PepsiCo, not wanting to shell out the dough for such an upgrade, shut the plant down altogether instead. The union, of course, was incensed; Teamsters Local 727 announced it would “take any and all legal action” to address the matter. The plant was closed without any union input and, the union noted, was illegal under the Worker Adjustment and Retraining Notification (WARN) Act provisions.
Pepsi Gets into Fashion
In a separate development, PepsiCo branched out into the fashion market with a new collaboration between itself and Law Roach, a stylist and “image architect.” The two sides are building a new fashion line around Wild Cherry Pepsi, which looks to reflect the “spirit of innovation” that lives on in PepsiCo’s beverage line, apparently.
The lineup will include everything from basic clothing—bomber jackets, crew socks, tall socks, and baby tees—to less expected pieces like “tearaway track pants,” “statement shorts,” and in perhaps the oddest twist, “a bold denim jumpsuit.”
Is PepsiCo Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on PEP stock based on six Buys and nine Holds assigned in the past three months, as indicated by the graphic below. After a 7% rally in its share price over the past year, the average PEP price target of $184.47 per share implies 10.36% upside potential.
