PepsiCo Surges 3.13% Amid Activist Pressure and Sector Shifts—What’s Fueling the Rally?

Summary
• PepsiCo cuts 20% of U.S. SKUs and closes three plants under activist investor pressure
• JPMorgan upgrades PEP with a bullish price target
• Intraday price jumps 3.13% to $149.17, trading near 52-week high

PepsiCo’s stock is surging on a perfect storm of activist-driven restructuring, sector tailwinds, and a strategic pivot toward affordability and innovation. With the stock trading near its 52-week high of $160.15, investors are weighing the impact of Elliott Investment Management’s $4B stake and the company’s aggressive SKU rationalization. The non-alcoholic beverage sector is also heating up, as Thrive Market’s alcohol exit signals a $5B market shift by 2028.

Activist-Driven Restructuring Sparks PEP Rally
PepsiCo’s 3.13% intraday surge is directly tied to its aggressive cost-cutting measures and product rationalization under pressure from Elliott Investment Management. The company announced the elimination of 20% of U.S. SKUs, closure of three plants, and a focus on affordability to boost core business growth. These moves align with Elliott’s demands for operational efficiency and margin expansion. Additionally, JPMorgan’s upgrade to PEP, citing innovation-driven growth, has amplified investor confidence. CEO Ramon Laguarta’s emphasis on 2026 margin improvements and 2–4% core sales growth further underpins the bullish sentiment.

Non-Alcoholic Beverage Sector Gains Momentum as Thrive Market Pivots
The non-alcoholic beverage sector is gaining traction as Thrive Market exits alcohol entirely, reflecting broader consumer shifts toward wellness and moderation. PepsiCo’s SKU cuts and affordability focus align with this trend, positioning it to capture market share in a $5B non-alcoholic drinks segment by 2028. While Coca-Cola (KO) trades down 0.21%, PepsiCo’s 3.13% rally highlights divergent strategies: KO’s traditional beverage model contrasts with PEP’s innovation-driven, cost-cutting approach.

Options Playbook: Leveraging PEP’s Volatility with Strategic Contracts
• MACD: -0.066 (bearish divergence), RSI: 35.07 (oversold), Bollinger Bands: $143.52–$149.80 (price near upper band)
• 200D MA: $142.28 (price above), 30D MA: $145.99 (support near $146.02)

PEP’s technicals suggest a short-term bullish breakout after testing key resistance. The stock is trading near its 52-week high, with RSI in oversold territory and Bollinger Bands indicating a potential reversal. For options, focus on contracts with moderate delta, high gamma, and liquidity. Two top picks:

• PEP20251219C145 (Call, $145 strike, 12/19 expiry):
- IV: 22.19% (reasonable), Leverage: 237.14% (high), Delta: 0.776 (aggressive), Theta: -0.0637 (moderate decay), Gamma: 0.0513 (high sensitivity), Turnover: 14,780 (liquid)
- This call offers explosive upside if PEP breaks $145, with high leverage and gamma amplifying gains as the stock rises.

• PEP20251219C148 (Call, $148 strike, 12/19 expiry):
- IV: 20.76% (reasonable), Leverage: 52.98% (moderate), Delta: 0.615 (balanced), Theta: -0.1192 (high decay), Gamma: 0.0744 (high sensitivity), Turnover: 55,922 (extremely liquid)
- Ideal for a mid-term hold, this contract balances leverage with liquidity, capitalizing on PEP’s momentum without excessive time decay.

Payoff Estimation: At a 5% upside (target $156.63), PEP20251219C145 yields $11.63/share, while PEP20251219C148 yields $8.63/share. Aggressive bulls should buy PEP20251219C145 into a break above $145.

Backtest Pepsico Stock Performance
The backtest of the Performance of the ETF PEP (iShares Core S&P 500 ETF) after a 3% intraday surge from 2022 to now shows mixed results. The 3-day win rate is 49.69%, the 10-day win rate is 46.12%, and the 30-day win rate is 46.75%. However, the ETF experienced a slight decline, with a maximum return of -0.04% over the 30-day period, indicating that while there is a decent probability of positive returns in the short term, long-term performance is lackluster.

PEP’s Bullish Momentum: Time to Ride the Wave or Secure Profits?
PepsiCo’s rally is fueled by structural cost cuts, activist alignment, and sector tailwinds in non-alcoholic beverages. While the stock’s 3.13% surge suggests short-term optimism, traders must monitor the 200D MA ($142.28) and 52-week high ($160.15) for sustainability. Coca-Cola’s 0.21% decline underscores PEP’s outperformance in a shifting sector. Hold long positions if PEP stays above $146.02 (30D support) and watch for a breakout above $149.80 (Bollinger upper band). Act now: Buy PEP20251219C145 if $145 breaks, or secure profits near $149.55 (intraday high).