Can PepsiCo Regain Its Growth Stock Status With the Q3 Report?
Jim Cramer just stripped PepsiCo of its growth stock label, and on October 8 the company gets one shot to prove him wrong. The numbers management must hit are narrower than most investors realize.
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Jim Cramer no longer calls PepsiCo (NASDAQ: PEP | PEP Price Prediction) a growth company. Can the beverage and snack giant change that when it reports third-quarter results October 8, 2026? The release is scheduled for 6:00 a.m. EDT, followed by an 8:15 a.m. EDT analyst call, according to PepsiCo Investor Relations.
Cramer Went From Buyer to Skeptic in Three Months
On Mad Money, Cramer’s opinion moved in one direction. In July, he called the pullback a terrific place to start a position. In August, Jim Cramer pointed to an “accidentally high 4% yield,” then called it “the genesis of an idea, not a position.”
On September 28, 2026, responding to a Deutsche Bank downgrade to Hold, Cramer called PepsiCo a ten-year winner, then added, “I can’t call it that anymore.” On October 2, 2026, Cramer said, “Frito-Lay is uniquely in the crosshairs of the GLP-1s and the health-conscious younger consumers.” GLP-1 drugs suppress appetite, which can mean fewer snack purchases.
His Ten-Year Chart Hides a Five-Year Slump
As of October 7, PepsiCo has had a total return of 62.5% over ten years but fell 5.0% over five years, 9.3% this year, and 8.2% in the past month.
On Wednesday, shares traded just above the $124.22 52-week low and well below the $171.48 high. Cramer’s reversal reflects the five-year chart catching up with the ten-year one. PepsiCo is simultaneously a decade-long winner and a half-decade loser.
Benchmarks That Thursday’s Numbers Must Clear
| Metric | Q3 FY2025 (Year Ago) | FY2025 | FY2026 Guidance |
|---|---|---|---|
| Core EPS | $2.29 | $8.14 | 4–6% growth |
| Revenue | $23.9B | $93.9B | 4–6% growth |
| Organic Revenue Growth | 1.3% | 1.7% | 2–4% |
Wall Street Is Parked on Hold
Analysts carry many more Hold ratings than Buys or Sells, with a $148.64 consensus target. A Hold rating means an analyst expects average returns, so a wall of them signals missing conviction in either direction.
As of October 7, the yield stood at 4.7% with a trailing P/E of 16. That yield is higher than the 4% Cramer flagged in August. Management raised the dividend 4% this year, its 54th straight increase.
Volume and Margins Will Settle the Growth Debate
CEO Ramon Laguarta said earlier this year that the company was focused on “accelerating top line growth, including the restaging of certain global brands” and “investing in certain affordability initiatives.”
Revenue can grow while fewer chip bags sell when price increases outrun lost volume, until shoppers push back. Last quarter, North America Foods revenue fell 2% on lower net pricing, so price cuts now need to recover volume.
- Frito-Lay volume: Management said U.S. foods returned to volume growth. Watch whether North America beverages, up 7% last quarter, can keep carrying the load.
- Margins: Core operating margin contracted 40 bps in Q2, and the CFO noted a higher third-quarter tax rate and EPS toward the low end of guidance.
- GLP-1 commentary: Any data on appetite-suppressing drugs and their impact on younger consumers would address the structural question.
- International: Management expects international revenue to cross $40 billion this year.
What Would Earn Back the Growth Label
The label returns only if North America Foods shows positive volume without another margin step-down and management reaffirms 2% to 4% organic growth. Volume bought purely through price cuts, or a full-year outlook sliding lower, would confirm Cramer’s view.
Dividend investors should check free cash flow conversion against the 80% target. In the Q3 report, look at North America Foods volume and core operating margin first.
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Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.
Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community.
Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.
Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, moderating workshop sessions at regional conventions.
