PepsiCo’s Next Big Rally Could Be Just Getting Started

PepsiCo (NASDAQ:PEP | PEP Price Prediction) is trading at $149.27 as of May 13, 2026, down 4.29% over the past week despite a strong Q1 earnings report. Our 24/7 Wall St. price target for PepsiCo is $175.82, implying 17.79% upside over the next 12 months. The recommendation is buy, with a high confidence reading of 90%.

24/7 Wall St. Price Target Summary

From February Highs to a May Pullback

PEP is up 19.13% over the past year and 4.93% year to date, though shares have cooled off from a 52-week high of $169.96.

Q1 FY2026, released April 23, 2026, was a clear beat. Core EPS came in at $1.61 versus the $1.54 consensus, and revenue of $19.443 billion grew 8.5% YoY. Operating margin expanded 210 basis points to 16.5%, and international momentum was the standout, with EMEA core operating profit up 29% and Asia Pacific Foods up 35%.

Management affirmed fiscal 2026 guidance for 2-4% organic revenue growth and 4-6% core constant currency EPS growth, alongside the 54th consecutive annual dividend increase.

Why Bulls See a Breakout Ahead

The bull case rests on international acceleration and North America normalization. With EMEA revenue up 18%, LatAm Foods up 16%, and PBNA growing 9%, the geographic mix shift is doing real work. CEO Ramon Laguarta highlighted “an acceleration in both net revenue and organic revenue growth” with the convenient foods volume recovery finally taking hold.

The analyst consensus target of $172.10 sits well above current levels, with 4 Strong Buys, 4 Buys, 14 Holds, and 1 Sell. In our bull scenario, the stock reaches $183.28 over the next 12 months on poppi contribution, sustained margin expansion, and the $10 billion buyback authorization. The 54th consecutive dividend increase and a 3.68% yield offer a hard floor for income investors.

The Risks Worth Watching

The bear case starts with US consumer affordability and tariff-driven commodity pressure. FY2025 operating income fell 19.57% YoY, weighed down by nearly $2 billion in Rockstar and Be & Cheery impairments. Bulls would counter that those are non-recurring charges already reflected in the base, and Q1 FY2026 net income jumped 84.24% YoY as the comparison cleared.

North America convenient foods volume softness remains the most cited bear talking point, though sequential improvement is now visible. In a bear scenario, PEP drifts to $156.24, a roughly 4.67% return that still beats cash thanks to the dividend.

Our Take on PepsiCo

My final 24/7 Wall St. price target stands at $175.82, a buy rating with 90% confidence. The key factor tipping the scale is the combination of margin expansion, international acceleration, and a forward P/E of 18x against double-digit segment growth.

The setup looks compelling for investors seeking a low-beta compounder with a 3.68% yield and a 54-year dividend track record. Caution is warranted for investors who expect tariffs to gut commodity costs further or US consumers to keep trading down through 2027.

These projections assume PepsiCo continues executing on international expansion and margin recovery. Significant upside or downside could come from tariff policy shifts, the poppi integration, or a sharper-than-expected swing in US consumer staples demand.