PEP

PepsiCo has renewed its exclusive beverage partnership with Taco Bell for 11 years through 2036, covering U.S. locations and international markets. The deal comes as a win following PepsiCo's recent loss of KFC to Coca-Cola. While the Taco Bell renewal is positive, the analyst notes PepsiCo faces challenges with flat organic sales in North America and suggests the deal may not be a major game-changer for the company's fundamentals.

PepsiCo is strengthening its North American snacks business through portion-controlled formats and innovation, with volumes improving to low-single-digit growth in 2026. Keurig Dr Pepper and Coca-Cola are leveraging product innovation, affordable packaging, and portfolio diversification to drive growth amid consumer spending pressures. However, PepsiCo faces persistent margin headwinds and rising input costs, with its stock rated a Zacks Rank #4 (Sell).

Consumer staples companies PepsiCo, McCormick, Hormel, and Clorox are trading near 52-week lows due to headwinds including changing consumer preferences toward healthier products, budget constraints, and rising costs. However, these companies offer attractive dividend yields (4.1%-5.7%) and have proven track records as dividend growers, making them potentially opportunistic buys for long-term dividend investors.