Zheng Feng Chee, an analyst from DBS, maintained the Buy rating on PepsiCo (PEP – Research Report). The associated price target is $172.00.
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Zheng Feng Chee has given his Buy rating due to a combination of factors including PepsiCo’s strategic focus on innovation and international market expansion. The company is investing significantly in product development and category diversification, particularly in North America, with new offerings like Muscle Milk and grain-free tortillas. This approach is expected to rejuvenate growth in the region by tapping into the away-from-home food segment, which remains underpenetrated.
In addition, PepsiCo’s international markets offer substantial growth potential due to lower per capita consumption of snacks and beverages compared to the US. The company’s ongoing investments in potato farms and factories in these regions aim to improve operational scale and product affordability, supporting future growth. Despite a conservative near-term growth outlook, the potential for long-term revenue and earnings expansion, driven by these initiatives, underpins the Buy rating.
In another report released yesterday, Jefferies also maintained a Buy rating on the stock with a $171.00 price target.