Bank of America analyst Bryan Spillane has revised his outlook on PepsiCo (PEP, Financial), downgrading the company from a "Buy" to a "Neutral" rating. Accompanying this change, Spillane has adjusted the price target for PepsiCo shares to $155, a reduction from the previous target of $185.
The downgrade primarily stems from anticipated sluggish growth in Frito-Lay North America, a crucial segment for PepsiCo. While international divisions are scaling and contributing significantly to sales and profit, their impact is currently insufficient to counterbalance the slower growth experienced by North American snacks.
Spillane has communicated to investors that, under current conditions, there is limited potential for PepsiCo to exceed revenue expectations or achieve more than low single-digit earnings per share growth in the coming years, specifically in 2025 and 2026.
