By Peet Serfontein and Khumbulani Kunene
We enter a long position with a target price of $158.00 and a stop-loss of $133.00.
PepsiCo is a food and beverage business that manufactures and sells a variety of grain-based snacks, carbonated and non-carbonated beverages, and foods. The company has a highly diversified portfolio of well-established brands, including Pepsi, Gatorade, Mountain Dew, Lay's, Doritos, Cheetos and Quaker.
PepsiCo operates across more than 200 countries and territories with its biggest market being the United States (US). The company continues to invest in innovation, operational efficiency, digital capabilities and healthier alternatives to strengthen its long-term competitive position.
Technically, the seasonal profile for the stock presents an attractive buying opportunity (see the first insert on the main chart). This pattern provides moderate bullish support for the trade. Since 2000, the share has recorded an average return of +0.5% in September, +1.6% in October and +0.9% in November. This represents a combined average gain of ~3% across the three months, with October providing the strongest seasonal support.
The De-trended Price Oscillator (DPO) also supports a bullish case for the stock (see the second insert). This pattern provides early bullish support, with the recent upward movement suggesting that negative short-term momentum is beginning to weaken. A rise above the zero line would provide stronger confirmation.
Share performance
Share information
| Share Code | PEP US |
| Industry | Food, Beverage & Tobacco |
| Market Capital (USD) | 191.3 billion |
| One-Year Total Return | -4.27% |
| Return Year-to-Date | -0.46% |
| Current Price (USD) | 140.13 |
| 52-Week High (USD) | 171.48 |
| 52-Week Low (USD) | 133.73 |
| Financial Year End | December |
| The price remains below its 200-day simple moving average (SMA), and the trade idea is regarded as a counter-trend strategy. | |
Consensus expectations (Bloomberg)
| FY25 | FY26E | FY27E | FY28E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | 8.14 | 8.56 | 8.98 | 9.52 |
| Growth (%) | 5.18 | 4.87 | 6.04 | |
| Dividend Per Share (USD) | 5.62 | 5.84 | 6.15 | 6.52 |
| Growth (%) | 3.94 | 5.27 | 6.00 | |
| Forward PE (times) | 15.88 | 15.03 | 14.72 | |
| Forward Dividend Yield (%) | 4.17 | 4.39 | 4.65 | |
| Earnings growth is expected to be stable over the medium term as the group continues to focus on continued investment in brand revitalisation, product innovation and disciplined cost management. | ||||
Buy/sell rationale
Technical analysis
Fundamental view
Update on previous trade ideas
| Share Name and position | Entry | Current Price | Movement | Comment | Time to exit |
|---|---|---|---|---|---|
| GILD - Buy (Continue to hold) | 135.77 | 143.44 | +5.6% | The AI model's forecast targeted levels remain of interest. The price remains above its 200-day SMA. Upside momentum is supportive. Our profit target is maintained at $155.00 with a trailing stop-loss at $139.00. | 18 November 2026 |
| VMC - Buy (Continue to hold) | 268.94 | 271.65 | +1.0% | The combination of supportive long-term trend dynamics, improving momentum conditions and favourable mean-reversion characteristics remains of interest. The price remains just below its 200-day SMA And sudden downside momentum is a concern. Our profit target is maintained at $314.00 with a trailing stop-loss at ~$262.00. | 19 August 2026 |
| SYK - Buy (Continue to hold) | 329.74 | 331.37 | +0.5% | The price at the lower range of an inclining linear regression channel pattern remains of interest. It has dipped just below its 200-day SMA and upside momentum has halted, which is a concern. Our profit target is maintained at $401.00 with a trailing stop-loss at $321.00. | 14 October 2026 |
| DD - Buy (Continue to hold) | 140.77 | 138.81 | -1.4% | The price at the start of wave 5 out of the Elliott wave price theory remains of interest. It is still above its 200-day SMA; however, sudden downside momentum is a concern. Our profit target is maintained at $170.00 with a trailing stop-loss at $130.00. | 7 October 2026 |
| TSN - Buy (Continue to hold) | 58.74 | 57.99 | -1.3% | The price is still in a developing inclining channel pattern, which remains of interest. It is also still wedged between its 200-week SMA support and its 200-day SMA resistance. Fading downside momentum is supportive. Our profit target is maintained at $69.00 with a trailing stop-loss at $56.00. | 28 October 2026 |
