PEP Q3 Preview: RBC Sees 'Soft' September Quarter, Cuts Price Target To $150

RBC sees minimal room for upside for PepsiCo's top line amid persistent consumer and macro pressures, while higher freight and logistics costs are creating inflationary pressure and pressuring numbers in the December quarter and into early 2027, according to TheFly.

• RBC expects PepsiCo's September quarter to be 'soft', while noting the recent sell-off likely means investors are already bracing for the weakness.
• The price-target cut came as part of a broader Q3 preview covering the beverages, household and personal care, and packaged foods industries.
• UBS, Barclays and Evercore ISI have also recently lowered their PepsiCo price targets ahead of the company's Oct. 8 Q3 results.

PepsiCo (PEP) was in focus on Tuesday after RBC Capital lowered its price target on the shares to $150 from $161 while maintaining a 'Sector Perform' rating.

According to TheFly, the price-target change was part of a broader research note previewing third-quarter results across the beverages, household and personal care, and packaged foods industries. RBC expects the September quarter to be 'soft,' the analyst said in the note.

PEP shares traded marginally higher on Tuesday at the time of writing, after touching a 52-week low of $124.22 on Monday. 

Consumer And Macro Pressures

RBC said the difficult consumer environment and macro pressures have not abated, leaving minimal room for upside to PepsiCo's top line. The firm also pointed to higher freight and logistics costs, saying inflationary pressures from those costs are pressuring numbers in the December quarter and into early 2027.

PepsiCo's second-quarter net revenue rose 6.4% year over year to $24.18 billion, while organic revenue increased 2.4%. Core earnings per share (EPS) rose 4% to $2.20.

However, North American organic revenue declined 0.5% in the quarter, while PepsiCo highlighted continued strength in its international businesses.

PepsiCo reaffirmed its fiscal 2026 outlook following the second-quarter results, including organic revenue growth of 2%-4% and core constant-currency EPS growth of 4%-6%.

Other Analysts Cut PepsiCo Targets

RBC's target cut follows several other recent target reductions ahead of PepsiCo's third-quarter results.

On Oct. 2, UBS analyst Peter Grom lowered the firm's price target to $145 from $159 while maintaining a 'Buy' rating. Grom said PepsiCo faces a 'tough' near-term path forward, while downside appears largely priced in, according to TheFly.

Barclays lowered its price target to $133 from $142 on Oct. 1 while maintaining an 'Equal Weight' rating.

On Sept. 30, Evercore ISI lowered its price target to $135 from $150 while maintaining an 'In Line' rating. The firm said Q3 'looks fine' but lowered its FY27 estimates, citing the possibility that margin expectations heading into FY27 remain too high and could lead to downward EPS revisions.

According to Koyfin data, 18 of the 24 analysts covering PEP rate the stock 'Hold,' while five rate it 'Buy' or 'Strong Buy’ and one rates it 'Sell.'

PEP Q3 Results Due Oct. 8

PepsiCo is scheduled to report its third-quarter 2026 results before the market opens on Oct. 8. Analysts expect adjusted EPS of about $2.30 and revenue of approximately $24.95 billion for the quarter, according to data compiled by FiscalAI.

On Stocktwits, retail sentiment around PEP remained in ‘bullish territory.’

PEP shares have dropped nearly 12% year-to-date.

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