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    How PepsiCo’s North America Supply Chain Overhaul Will Impact PepsiCo (PEP) Investors

    Simply Wall St·01/06/2026 14:22:14
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    • In late 2025, PepsiCo announced a major North America supply chain overhaul following engagement with activist investor Elliott Investment Management, including plans to cut nearly 20% of its U.S. product lines, increase automation, and pursue core operating margin expansion over the next three fiscal years.
    • This sweeping SKU reduction and productivity push signals a willingness to simplify PepsiCo’s portfolio and reshape its cost base, with potential long-term effects on how its core beverage and snacks businesses are run and evaluated.
    • Next, we’ll examine how PepsiCo’s planned 20% SKU reduction in the U.S. could reshape its investment narrative and long-term appeal.

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    PepsiCo Investment Narrative Recap

    To own PepsiCo, you need to believe its scale in beverages and snacks, plus disciplined capital returns, outweigh slower expected growth and recent margin pressure. The North America supply chain overhaul and 20% SKU cut fit directly into the current productivity push, and may influence how quickly PepsiCo can stabilize margins, but they also raise execution risk if cuts bite into future growth capacity.

    The most relevant recent announcement is PepsiCo’s plan to simplify its U.S. portfolio and increase automation while targeting core operating margin expansion over the next three fiscal years. This ties directly to the near term catalyst of improving profitability after a year of weaker margins, but also interacts with the key risk that aggressive cost actions, plant changes, and integration efforts could constrain flexibility just as consumer preferences and input costs remain in flux.

    Yet investors should be aware that PepsiCo’s drive to streamline and automate comes with meaningful execution risk if...

    Read the full narrative on PepsiCo (it's free!)

    PepsiCo's narrative projects $101.5 billion revenue and $11.8 billion earnings by 2028. This requires 3.4% yearly revenue growth and roughly a $4.2 billion earnings increase from $7.6 billion today.

    Uncover how PepsiCo's forecasts yield a $155.91 fair value, a 11% upside to its current price.

    Exploring Other Perspectives

    PEP 1-Year Stock Price Chart
    PEP 1-Year Stock Price Chart

    Forty two fair value estimates from the Simply Wall St Community span roughly US$116 to US$247 per share, underlining how widely opinions can differ. Against that backdrop, PepsiCo’s ambitious cost cutting and automation plans, and the associated execution risks, give you several distinct scenarios for how its future performance could unfold, so it is worth weighing multiple viewpoints before forming a view.

    Explore 42 other fair value estimates on PepsiCo - why the stock might be worth 17% less than the current price!

    Build Your Own PepsiCo Narrative

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.