JPMorgan downgrades PepsiCo to Neutral in second cut of the week

JPMorgan has downgraded PepsiCo from Overweight to Neutral and reduced its price target, marking the second downgrade for the company within the week. The bank attributes the change to a stalled North American turnaround and rising costs. Analyst Andrea Teixeira suggests that while the upcoming quarter may still appear positive due to strong international sales, strong weather, and the FIFA World Cup, these gains may not offset continued underperformance in North America.

Despite various interventions like ingredient reformulation, packaging improvements, increased spending, and lower prices, salty snacks performance has been disappointing since Q1 2026. The bank anticipates PepsiCo will need to focus more on cost savings in the fourth quarter to achieve only low-end 5% to 7% earnings growth. JPMorgan has also lowered its 2027 and 2028 EPS estimates to $8.86 and $9.33, respectively, both below the market consensus.