A notable shift is occurring among major financial institutions regarding PepsiCo. Recent data reveals significant buying activity from heavyweight fund managers, coinciding with upward revisions to price targets on Wall Street. This renewed interest is underpinned by a strategic corporate overhaul set to enhance profitability from 2026 onward.
Analysts Revise Targets Upward
The growing institutional appetite aligns with increasingly optimistic research from analysts. Several firms have recently upgraded their outlook for the beverage and snack giant.
Piper Sandler raised its price target to $172 from $161, maintaining an “Overweight” rating. This adjustment is driven by preliminary 2026 financial forecasts that exceed prior operating income expectations. The firm’s analysts note that while operational momentum began later than initially anticipated, the path forward for the coming years is now clearer.
In a similar move, J.P. Morgan upgraded the stock from “Neutral” to “Overweight,” setting a $164 price objective. The bank cites an accelerated agenda in innovation and marketing as the rationale, suggesting these initiatives could enable high single-digit earnings growth for shareholders next year. This positive sentiment is further supported by a rising consensus estimate for 2025 earnings per share (EPS), indicating a strengthening fundamental case for the equity.
Major Funds Increase Their Stakes
Weekend filings highlight a clear trend: institutional capital is flowing into PepsiCo shares in substantial volume.
The activity of AQR Capital Management is particularly striking. The fund increased its stake by 38.6%, purchasing an additional 746,049 shares. This brings AQR’s total holding to approximately 2.68 million PepsiCo shares, valued at over $351 million.
AQR is not alone in its bullish positioning. Other major institutions have also expanded their commitments:
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- Charles Schwab Investment Management grew its position by 9.7%.
- The Vanguard Group acquired more than 1.7 million additional shares.
- State Street Corp added 920,045 shares to its portfolio.
Such inflows suggest large-scale investors find the risk-reward profile attractive at current levels. This is reflected in the technical picture: the share price is trading just above its 50-day moving average of €127.22 and remains above its 200-day line (€123.41), even though it is down approximately 12.5% year-to-date. This indicates the stock is emerging from a period of weakness and showing initial signs of stabilization.
Strategic Overhaul with Elliott Management
The improving market sentiment is closely tied to concrete operational shifts. PepsiCo is currently working on an agreement with activist investor Elliott Management, aiming to streamline operations and boost profitability.
The strategic review centers on several key initiatives:
- Cost Reduction: A significant cut in ongoing expenses, including the closure of certain production lines.
- Price Management: Targeted price reductions on select products to ease pressure on consumers and support sales volumes.
- Portfolio Focus: A potential reduction of the US product portfolio by up to 20%, designed to concentrate resources more effectively on high-margin core brands.
These measures are intended to deliver faster organic revenue growth and improved operating margins starting in 2026. The market has already begun to reward this strategic direction: the stock has gained about 2.8% over the past month, though it remains down roughly 15% over a twelve-month period, suggesting room for further recovery.
Technical Perspective and Outlook
From a technical standpoint, PepsiCo appears to have solid support. The share price is trading above its key 50, 100, and 200-day moving averages. Meanwhile, a 14-day Relative Strength Index (RSI) reading of 35.3 indicates the stock is not in overbought territory. This combination of an intact underlying trend and room for technical advancement supports the narrative of a gradual base formation following a weaker phase.
Taken together—the increased buying from institutional investors, raised price targets from leading analysts, and the ongoing efficiency program—a scenario is emerging where the successful execution of cost-saving measures and portfolio adjustments from 2026 onward is likely to be the critical driver for future share price performance.
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