Major Funds Signal Confidence in PepsiCo’s Turnaround Plan

A notable shift appears to be underway for PepsiCo's stock following an extended period of downward pressure. Market confidence is being bolstered not merely by a recent settlement with activist investor Elliott Management, but more significantly by a conspicuous wave of buying from major institutional players. Observers interpret this activity as a powerful vote of confidence that the company's radical restructuring strategy may yield results, signaling a potential return of trust in the snack and beverage giant.

This institutional optimism is reinforced by a favorable shift in sentiment from Wall Street research desks. JPMorgan upgraded its rating on the shares to "Overweight," accompanied by a substantial increase in its price target. Goldman Sachs reaffirmed its buy recommendation. Analysts cite the regained strategic clarity and the earnings potential embedded in the restructuring plan as key drivers for their positive outlook.

Solid underlying business metrics further support the constructive case:
* Earnings Performance: Third-quarter earnings per share came in at $2.29, surpassing market expectations.
* Dividend Appeal: The stock offers a defensive component with a current dividend yield of approximately 3.8%, providing income during the transition phase.

Strategic Overhaul Attracts Key Investors

Recent regulatory filings reveal that several prominent investment funds have significantly increased their stakes. Holocene Advisors stands out, having boosted its PepsiCo position by more than 2,400 percent. Wellington Capital Management also entered a new position, taking advantage of the recent share price levels. These substantial inflows occurred just days after the company announced a comprehensive agreement with Elliott Investment Management.

Should investors sell immediately? Or is it worth buying Pepsi?

The cornerstone of the new strategy is a sharp focus on efficiency: the company aims to eliminate nearly 20% of its product variants (SKUs) by early 2026. This portfolio simplification is designed to prioritize high-margin core brands like Cheetos and Gatorade while streamlining supply chains. Market experts view this move as a necessary step to restore profitability, which has shown recent signs of weakness.

Technical Picture and Forward Path

Despite the influx of positive developments, the share price remains down roughly 12.5% since the start of the year. However, Friday's closing price of €128.10 indicates stabilization above the annual lows. The gap to the 50-day moving average has now narrowed to less than one percent, suggesting a potential base is forming.

The precise execution of the announced measures is now critical for a sustained recovery. Investor attention is focused on the first half of 2026, when the cost-saving initiatives are projected to take full effect. The next significant milestone will be the fourth-quarter earnings report, where the market will look for concrete evidence of successful progress in pruning the product portfolio.