PepsiCo Shares Fall 0.75% on 50.6% Volume Drop to 1.29 Billion, Ranking 55th on NASDAQ

Market Snapshot

PepsiCo (PEP) shares fell 0.75% on December 22, 2025, closing at $148.16, according to MarketBeat data. The stock traded with a volume of 1.29 billion, a 50.63% decline from the prior day, ranking 55th in trading activity on the NASDAQ. The company maintains a market capitalization of $202.59 billion, a price-to-earnings (P/E) ratio of 28.17, and a beta of 0.42, reflecting its low volatility relative to the broader market. Analysts have assigned a consensus rating of "Hold" with an average price target of $158.75, based on eight "Buy," 13 "Hold," and one "Sell" ratings.

Key Drivers

The stock’s decline appears tied to mixed institutional activity and valuation concerns. Brighton Jones LLC increased its stake in PepsiCo by 16.4% in Q3 2025, adding 11,201 shares to hold 79,474 shares valued at $11.16 million. Conversely, Gradient Investments LLC slashed its position by 95.7%, selling 86,626 shares and retaining 3,867 shares worth $543,000. Exchange Traded Concepts LLC also reduced its holdings by 5.5%, selling 16,745 shares to hold 286,441 shares valued at $40.23 million. These divergent moves highlight uncertainty among institutional investors, despite PepsiCo’s strong dividend yield of 3.8% and a payout ratio of 108.17%, which raises sustainability concerns.

The dividend announcement itself—$1.4225 per share, payable on January 6—may have tempered investor enthusiasm. While the yield is attractive, the elevated payout ratio suggests limited room for future increases, particularly if earnings growth slows. Analysts at JPMorgan upgraded the stock to "Overweight" with a $164 target, while DZ Bank raised its rating to "Buy" at $167. However, these upgrades were offset by a "Hold" rating from BNP Paribas Exane, which cut its price target to $150, and a "Sell" rating from Rothschild & Co Redburn, which lowered its target to $120. The mixed analyst outlook reflects cautious optimism about PepsiCo’s long-term prospects amid near-term valuation pressures.

Market fundamentals also played a role. PepsiCo’s debt-to-equity ratio of 2.26 and liquidity metrics—a quick ratio of 0.72 and a current ratio of 0.91—signal a leveraged but stable balance sheet. Recent earnings reports showed resilience, with $2.29 earnings per share (EPS) for Q3 2025, surpassing estimates by $0.03 and driving a 2.7% year-over-year revenue increase to $23.94 billion. However, the P/E ratio of 28.17 and a PEG ratio of 5.11 suggest the stock trades at a premium relative to earnings growth, deterring some investors.

Sentiment was further influenced by broader market dynamics. PepsiCo’s 50-day moving average of $148.00 and 200-day average of $143.02 indicate a sideways trend, with the stock hovering near its 52-week low of $127.60. While the 12-month high of $160.15 remains a distant target, the lack of momentum in key technical indicators may have contributed to the decline. Analysts at Wall Street Zen upgraded the stock to "Buy" in late December, citing long-term growth potential, but this optimism has yet to translate into near-term price action.

Institutional ownership remains a critical factor, with 73.07% of shares held by hedge funds and other institutional investors. The recent trimming of positions by firms like Baldwin Wealth Partners LLC MA (80.5% reduction) and Matrix Asset Advisors Inc. NY (23,488 shares sold) suggests a defensive posture in the face of macroeconomic uncertainty. Conversely, smaller firms such as Vermillion & White Wealth Management Group LLC and Frazier Financial Advisors LLC increased their stakes by 107.1% and 85.3%, respectively, signaling confidence in PepsiCo’s dividend-driven appeal.

In summary, PepsiCo’s stock performance on December 22 was shaped by a combination of institutional portfolio adjustments, dividend sustainability concerns, and mixed analyst guidance. While the company’s strong earnings and global brand remain strengths, valuation metrics and high payout ratios highlight risks for investors seeking growth. The path forward will depend on whether earnings can justify the current P/E premium and whether institutional investors regain conviction in the stock’s long-term prospects.