Key Highlights
- Morgan Dempsey Capital Management boosted its PepsiCo holdings by 35.7%, acquiring an additional 7,311 shares valued at approximately $4.3 million.
- Second-quarter results surpassed expectations, delivering earnings per share of $2.20 and revenues reaching $24.18 billion, representing a 6.4% year-over-year increase.
- The company announced a quarterly dividend hike to $1.48 per share, marking a 4% rise and yielding 4.3% on an annualized basis.
- Shares started trading Friday at $137.12, hovering close to the 52-week low of $134.65, while analysts maintain a collective “Hold” rating.
- Full-year 2026 earnings guidance targets a range of $8.55 to $8.71 per share, though several analysts have reduced their projections.
Shares of PepsiCo (PEP) began Friday’s session at $137.12, trading near the stock’s 52-week trough of $134.65 and significantly below its 12-month peak of $171.48.
While the share price remains under pressure, major institutional players continue accumulating positions. Morgan Dempsey Capital Management expanded its stake by 35.7% during the first quarter, purchasing 7,311 additional shares to reach a total of 27,814 shares worth approximately $4.3 million.
The firm wasn’t the only buyer. Jennison Associates dramatically increased its holdings by 157%, adding 323,278 shares for a combined position of 529,129 shares. Meanwhile, Mediolanum International Funds grew its stake by 22.4%, now controlling 254,688 shares.
Collectively, institutional investors command 73.07% of PepsiCo stock.
Regarding quarterly performance, PepsiCo delivered second-quarter earnings per share of $2.20, narrowly exceeding the Street consensus of $2.19. Top-line results reached $24.18 billion, surpassing analyst projections of $23.95 billion.
The revenue figure represented a 6.4% jump versus the corresponding period in the previous year. Net margin came in at 10.78%, while the company posted a return on equity of 54.63%.
54th Consecutive Year of Dividend Growth
The beverage and snack giant announced a quarterly payout of $1.48 per share, an increase from the prior $1.42 ā reflecting a 4% boost compared to last year’s distribution. The annualized dividend now totals $5.92 per share, scheduled for payment on September 30, 2026.
This represents the company’s 54th straight year of dividend growth, an unbroken run dating back to 1965.
The dividend currently yields 4.3%, accompanied by a payout ratio of 77.59%. For shareholders prioritizing income stability, this track record remains compelling.
Management’s fiscal 2026 earnings per share outlook spans $8.55 to $8.71, with Wall Street’s consensus estimate landing at $8.58 for the complete fiscal year.
Wall Street Takes Cautious Stance
Analyst opinions vary considerably. UBS established a price objective of $159.00, whereas Deutsche Bank positioned its target at $155.00. Barclays lowered its forecast from $144.00 down to $138.00 while keeping an “equal weight” designation.
Sanford C. Bernstein placed its target at $134.00 ā beneath where shares currently trade.
Among 20 covering analysts, seven assign a Buy rating, twelve recommend Hold, and one suggests Sell. The average price target stands at $157.70.
Erste Group Bank has adjusted downward its fiscal 2026 and 2027 earnings estimates, expressing concern regarding decelerating profit expansion. Additional headwinds include data showing declining U.S. grocery unit sales, contributing to cautious sentiment.
PepsiCo’s chief executive expressed measured optimism regarding the second-half outlook, noting resilient consumer demand despite weather-driven unpredictability.
The company’s Indian division reported robust first-half performance and revealed plans for a new food production facility in Tamil Nadu.
As of Friday’s close, PEP’s 50-day moving average sits at $143.53 while the 200-day moving average rests at $151.21, both substantially above the current trading level.
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