Wells Fargo has raised its price target on PepsiCo (NASDAQ:PEP) to $165.00 from $154.00 and left its rating at Equal Weight, reflecting the bank's revised view of the company's near-term valuation. The updated target aligns closely with InvestingPro's Fair Value assessment and sits within the range of analysts' targets cited by the market, which run from $120 to $191 per share.
PepsiCo's shares reacted positively to the news and related company results. The stock climbed 4.9% on the day the change was reported, outpacing a 1.7% gain in the broader consumer staples sector. The move added to recent momentum: PepsiCo shares have advanced 9.66% over the past week and are trading near a 52-week high of $163.44.
Wells Fargo's commentary tied the stock's trajectory to expectations for a recovery in volumes at PepsiCo Foods North America - the firm predicts volumes will turn positive in the first quarter of 2026 and then accelerate through the remainder of the year. Those projections are expected to be supported by shelf gains slated for April and May.
The company continues to report robust underlying profitability. PepsiCo maintained gross profit margins of 54.15% and recorded revenue growth of 2.25% over the last twelve months, figures noted by analysts as indicators of the firm's ongoing margin strength.
Wells Fargo also highlighted the broader market context in which PepsiCo is operating. According to the firm, 2026 has produced the strongest start for consumer staples stocks versus the S&P 500 in generations - outperforming the broader index by 1,000 basis points so far this year. The bank observed that this magnitude of outperformance has been rare since 1990, citing a prior comparable period in 2016 when the sector outpaced the S&P 500 by 560 basis points.
In explaining the stock's recent performance, Wells Fargo pointed to a combination of PepsiCo's internal targets and the sector-wide strength. The analyst noted that PepsiCo's explicit commitment to volume growth in the first half of 2026 "brought forward a key tenet of the recovery story," a factor the firm sees as contributing to investor interest.
Those investor reactions followed PepsiCo's fourth-quarter 2025 financial results, which the company described as about in-line with expectations. PepsiCo reported adjusted earnings per share of $2.26, narrowly exceeding consensus forecasts of $2.24. Revenue for the quarter came in at $29.34 billion, topping an anticipated $28.98 billion.
The combination of an EPS beat and a revenue surplus has been interpreted by market participants as a sign of the company's current financial health, and several analyst firms have cited the results as supporting potential future growth. The market response to both the reported quarterly results and Wells Fargo's price-target increase has driven the recent uptick in PepsiCo's share price.
While Wells Fargo maintained an Equal Weight rating, the raised target reflects the bank's updated valuation view amid the company's reported margins, revenue growth, and projected volume recovery in PFNA. Observers will be watching the early months of 2026 for confirmation that volumes turn positive as forecast and that the anticipated shelf gains materialize in April and May.