15 Best Defensive Stocks Amid Market Volatility

6. PepsiCo Inc. (NASDAQ:PEP)

Beta: 0.52

Number of Hedge Fund Holders: 69

Our next pick, PepsiCo Inc. (NASDAQ:PEP) is more than just a soft drink giant, it is a global food and beverage powerhouse. It has a diverse portfolio of brands, including Pepsi, Mountain Dew, Lay’s, Gatorade, and Quaker. With operations in over 200 countries, the company benefits from strong brand equity and a balanced revenue mix between beverages and snack foods.

On March 17, PepsiCo Inc. (NASDAQ:PEP) announced the acquisition of poppi, a rapidly growing prebiotic soda brand, for $1.95 billion. poppi is a modern functional soda that blends prebiotics, fruit juice, apple cider vinegar, and reduced sugar, catering to both cultural and wellness trends. While the acquisition aligns strategically with PepsiCo’s long-term goals, investors expressed concerns over the high valuation paid and the brand’s profitability.

Following the acquisition, Barclays analyst Lauren Lieberman downgraded PepsiCo (NASDAQ:PEP) from Overweight to Equal Weight, cutting the price target from $168 to $156. The downgrade reflects scepticism over the company’s ability to achieve a valuation re-rating, which largely depends on the performance of its U.S. snack division. The analyst sees the turnaround of Frito-Lay North America (FLNA) as a challenging task that could take several quarters to stabilize, particularly amid an uncertain macroeconomic environment. However, the analyst remains optimistic about FLNA’s long-term growth potential, expecting sustainable volume growth of 1.5%.

Despite near-term concerns, the consensus 1-year median price target stands at $164, suggesting a potential 13% upside. With its broad product portfolio and global distribution network, PepsiCo (NASDAQ:PEP) continues to innovate and adapt to evolving consumer preferences, strengthening its leadership in the food and beverage industry.