PepsiCo cuts 2025 guidance due to weak results, but stock is considered a bargain buy.

From Nasdaq: 2025-04-29 10:15:00

PepsiCo (NASDAQ: PEP) reported weak results and cut its full-year guidance, leading to a new 52-week low in shares. The company’s yield is now at 4.1%, with 53 consecutive years of dividend increases. Revenue declined by 1.8% and constant currency EPS by 4%, reflecting challenges in consumer demand. Pepsi cited tariffs, macroeconomic uncertainty, and consumer weakness for the guidance cut. Despite struggles, Pepsi continues to invest in product innovation and acquisitions to diversify its lineup. The stock is now considered a bargain buy with a 4.1% dividend yield and a cheap valuation.

Pepsi’s challenges include tariff turmoil, slowing growth, and added debt from recent acquisitions. However, the company remains profitable and can support its capital return program. The stock is currently too cheap to ignore with a 3% decline in core EPS forecast. Despite management’s lack of enthusiasm for the 2025 outlook, Pepsi is seen as a high-conviction buy for value investors. The company’s focus on value chains and product optimization can drive long-term margin growth. Investors with a three to five year horizon could benefit from Pepsi’s reliable income stock.



Read more at Nasdaq: PepsiCo Slashes 2025 Guidance. Is the High-Yield Dividend King Stock a Buy Anyway?