PepsiCo Posts In-Line Results As Guidance Reflects Tariff Costs, Analysts Say

Shares of PepsiCo Inc. (NASDAQ:PEP) tanked after the company reported a sales decline for the first quarter on Thursday.

BofA Securities On PepsiCo

Analyst Bryan Spillane maintained a Neutral rating while reducing the price target from $155 to $150.

PepsiCo reported its quarterly results broadly in line with consensus estimates, Spillane said in a note. Management’s 2025 earnings guidance reflects tariff costs of around 40 cents per share, he added.

There is a lack of clarity around a recovery in US salty snacks, given the macro volatility, Spillane stated. The company's earnings are expected to decline by around 11% year-on-year in the second quarter, $2.03 per share, "as weaker Frito sales/operating deleverage plays out, hampered further by a $76mil gain to corporate operating profit in the base period," he wrote.  

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Goldman Sachs On PepsiCo

Analyst Bonnie Herzog reiterated a Buy rating and a price target of $160.

PepsiCo's first-quarter results were "broadly in-line with subdued investor expectations," with earnings coming in at $1.48 per share, versus consensus estimates of $1.49 per share, Herzog said. The results were disappointing but not surprising, he added.

"Given higher expected supply chain costs related to tariffs, elevated macroeconomic volatility, and a subdued consumer backdrop," management lowered their full-year EPS growth guidance to around flat, from their prior projection of mid-single-digit growth, the analyst wrote.

While 2025 is shaping up to be a challenging year, PepsiCo's growth could reaccelerate, supported by earlier comps, initial return on investments, Continued strength internationally and increased focus on innovation, he stated.

PEP Price Action: Shares of PepsiCohad declined by 2.04% to $132.55 at the time of publication on Friday.

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