PepsiCo (PEP) Stock Jumps 3.5%: JPMorgan Upgrade & Elliott Deal Spark Rally

Another day, another Wall Street upgrade sending a legacy stock soaring—this time it's the soda-and-snack giant catching a bid.

The Catalysts: A One-Two Punch

JPMorgan analysts shifted their stance, boosting PepsiCo's rating. The move coincided with news of a strategic deal involving activist investor Elliott Management. Together, they lit the fuse for a 3.5% surge in PEP shares. Because nothing gets traditional capital flowing like a big bank's blessing and a hedge fund's nod.

Reading the Tape

The market's reaction was textbook. A major institutional upgrade provides perceived safety and momentum, while Elliott's involvement whispers of potential operational shake-ups or shareholder value plays. It's the kind of conventional finance drama that moves billions in a sector allergic to real disruption.

A Cynical Footnote

It's a stark reminder of how the old game is played: a few analysts change their minds, a fund takes a position, and suddenly a company making sugary drinks is 're-rated' for billions in new value. Meanwhile, decentralized networks that process millions of transactions per second fight for a fraction of that recognition. The machinery of traditional equity valuation remains, as ever, elegantly simplistic and profoundly influential.

TLDRs;

• PepsiCo shares jump 3.5% on heavy trading volume following significant strategic moves and investor developments.
• Elliott Investment Management deal highlights PepsiCo’s ambitious multi-year turnaround and growth-focused 2026 strategic plan.
• JPMorgan upgrades PepsiCo to Overweight, raising price target to $164, fueling renewed market optimism for PEP.
• Investors closely monitor dividend sustainability, rising leverage, and SKU cuts as PepsiCo executes aggressive strategy changes.

In December, 2025, PepsiCo (NASDAQ: PEP) experienced one of its most notable trading days of the year. Shares closed at $149.70, up 3.5% from the prior close of $144.64, with intraday activity ranging roughly from $147.00 to $149.78.

Trading volume nearly doubled to 18.4 million share, signaling that institutional investors were actively repositioning ahead of anticipated strategic changes.

PepsiCo, Inc., PEP

After-hours trading showed little further movement, with shares ticking marginally higher to $149.79. This suggests that the market largely digested the key developments during regular trading, leaving Thursday’s open to reflect investor reactions to the new narrative rather than any fresh surprises.

Elliott Deal and 2026 Turnaround Plan

The market rally followed PepsiCo’s deal with Elliott Investment Management, which holds about a $4 billion stake. The agreement supports a 2026 turnaround plan to streamline operations, boost shareholder value, and accelerate product innovation.

PepsiCo plans to cut nearly 20% of U.S. product variants, close three plants, and introduce more aggressive pricing for key brands like Lay’s and Doritos. The company will also launch new functional and protein-fortified products, including Simply NKD Doritos and a prebiotic Pepsi, while improving efficiency through supply chain reviews and automation, targeting 100 basis points of margin expansion over three years.

For 2026, PepsiCo expects 2–4% organic revenue growth, 4–6% reported net growth, and 5–7% core EPS growth, with free cash FLOW conversion of at least 80% and continued dividend growth.

JPMorgan Upgrade Spurs Market Optimism

Adding momentum to the rally, JPMorgan upgraded PepsiCo from Neutral to Overweight, raising its price target from $151 to $164. Analyst Andrea Faria Teixeira noted that the company’s accelerated innovation agenda, supported by productivity gains, could drive high single-digit total shareholder returns by 2026.

Other firms also expressed optimism, with Piper Sandler assigning an Overweight rating and a $172 target, UBS issuing a Buy rating with the same $172 target, and Jefferies maintaining a Hold rating at $164. JPMorgan emphasized that PepsiCo now blends defensive characteristics with a clearer growth and margin story, enhancing its appeal to investors who had traditionally viewed the stock mainly as a steady dividend payer.

Risks and Considerations Ahead

Despite the recent optimism, Wall Street remains cautiously positioned on PepsiCo, maintaining a consensus rating of Hold, with 7 Buy ratings, 14 Holds, and 1 Sell, and an average price target of approximately $157.60. Analysts are waiting to see how effectively the company executes its 2026 turnaround plan before adopting a more bullish stance.

Investors are closely watching several key factors. PepsiCo’s net debt of around $44 billion and a payout ratio above 100% raise questions about the sustainability of future dividend growth. The market is also monitoring the impact of SKU reductions and plant closures, as consumer and retailer responses to product cuts and pricing changes could influence near-term performance.

From a technical perspective, short-term support is identified NEAR $146–147, while $150 serves as a critical resistance level. A strong move above $150 could confirm market confidence in the new strategy, whereas failure to break through may lead to price consolidation.

Bottom Line

December 10’s trading activity reflects a significant shift in PepsiCo’s narrative. With Elliott’s involvement, a bold 2026 plan, and JPMorgan’s upgrade, PEP is now being viewed as a potential value-plus-growth stock rather than only a defensive dividend play.

Investors will be watching closely to determine whether the market embraces this multi-year turnaround or treats it as another short-lived activist-driven spike.