JPMorgan downgrades PepsiCo stock to 'Neutral'
JPMorgan downgrades PepsiCo (PEP) stock to “Neutral," cutting the company’s price target to $176 per share.
Yahoo Finance’s Diane King Hall reports live from the New York Stock Exchange to take a closer look at the factors surrounding the downgrade and possible obstacles for the food and beverage company, such as competition from other companies in its category and GLP-1 weight loss drugs.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video Transcript
BRAD SMITH: Shares of PepsiCo moving to the downside after getting hit with the downgrade. Let's get to Diane King Hall at the New York Stock Exchange with more. Hey, Diane.
DIANE KING HALL: Hey, guys. Sorry, I'm reconnecting with a bunch of people down here on the floor because, you know, I've been down here for years. So I want to talk about PepsiCo.
That is one of the stocks that we're watching this morning and it follows a move from JPMorgan Chase. That stock has been downgraded this morning, downgrading shares to neutral from overweight. That's Andrea Teixeira over at JPMorgan Chase reducing the price target on the shares to 176 from 185.
Now, there's still some upside potential based on that price target based on where the stock is. And in the pre-market it's only down a little bit. And PepsiCo really saying it's nothing really fundamentally wrong here, but they see more attractive options elsewhere.
Downgrading PepsiCo in conjunction with its 2024 year ahead outlook from JPMorgan Chase saying that they do continue to have confidence that the company is well positioned to deliver, but in terms of any exposure to that GLP-1, which they believe may be a little bit overblown. But again, they're seeing potential opportunities elsewhere like Coca-Cola, like Keurig. Coca-Cola not having a lot of movement in share price in the pre-market as well. Keurig having a little more action when you take a look at where that ticker is this morning, up about a percent in the pre-market We'll see how that actually takes off at the opening bell.
But again, the word with JPMorgan Chase is PepsiCo being downgraded to a neutral from overweight saying that, again, they do believe that it will be able to deliver on its long-term financial algorithm of 4.6% OSG. But the magnitude of upward estimate revision, they believe that is narrowing. So again taking a little bit of-- clipping a little bit of the wings for PepsiCo. I'll leave it there and send it back to you guys.
SEANA SMITH: All right, Diane, thanks so much. Again, limited room for positive surprises, at least that's what JP Morgan thinks when it comes to PepsiCo.
