Barclays analyst Lauren Lieberman recently downgraded PepsiCo, Inc. (NYSE: PEP) from “Overweight” to “Equal Weight,” reducing the price target from $168 to $156. This adjustment reflects concerns about the near-term performance of PepsiCo’s Frito-Lay North America (FLNA) division.
Reasons for the Downgrade
🥨 FLNA Volume Recovery – PepsiCo’s growth heavily depends on the recovery of Frito-Lay’s volume. There are concerns that it may take several quarters for trends to stabilize, especially considering a potentially challenging macroeconomic environment.
📉 Macro Backdrop – The current economic climate appears precarious, adding uncertainty to FLNA’s performance and PepsiCo’s overall growth prospects.
Despite these challenges, Barclays acknowledges FLNA’s potential to achieve sustainable 1.5% volume growth in the long term.
Dividend Fundamentals
💰 Dividend Yield – As of March 18, 2025, PepsiCo’s dividend yield stands at approximately 2.8%.
📅 Annual Dividend – The company pays an annual dividend of $4.60 per share, with a quarterly dividend of $1.15.
📈 Dividend Growth – PepsiCo has increased its dividend for 52 consecutive years, demonstrating a robust commitment to shareholder returns.
Investors may consider PepsiCo’s consistent dividend growth appealing, even as the company navigates challenges within its FLNA division.