Analysts Upgrade PEP, ABBV, UPS for 2026 Growth

3 Dividend Growth Stocks Analysts Are Upgrading for 2026

Individual analyst ratings and consensus price targets hold limited significance for investors unless viewed within the appropriate framework. This framework encompasses the intensity of market sentiment and its directional momentum, which for stocks such as PepsiCo (NASDAQ: PEP), AbbVie (NYSE: ABBV), and United Parcel Service (NYSE: UPS) remains robust and decidedly positive.

Sentiment intensity manifests through the volume of analyst coverage and the pace of recent updates, while the trend indicates whether revisions are trending upward or downward, along with shifts in the overall consensus price target. This analysis delves into the sentiment dynamics for these three stocks and explores their favorable ramifications for investment decisions heading into 2026.

PepsiCo Analysts Highlight a Deep-Value/High-Yield Opportunity

PepsiCo Dividend Payments

• Dividend Yield: 3.84%
• Annual Dividend: $5.69
• Dividend Increase Track Record: 54 Years
• Annualized 5-Year Dividend Growth: 7.06%
• Dividend Payout Ratio: 108.17%
• Next Dividend Payment: Jan. 6

PepsiCo, similar to many other consumer staples stocks, has encountered difficulties in recent periods. Factors including product recalls, broader economic pressures, and evolving consumer preferences led to subdued expansion and underwhelming share price gains. However, those challenging times have passed. The market has already accounted for the most adverse scenarios; positive changes are now gaining traction, and analysts’ sentiment has reverted to an accumulative stance toward the close of 2025.

Tracking data shows 15 revisions in the fourth quarter as of mid-December, featuring multiple price target hikes and a handful of upgrades. While the overall consensus rating stands at Hold, there is a clear bullish tilt, evidenced by expanded coverage compared to the prior year, inclusion of upgrades, and eight Buy ratings out of 22 total assessments. The consensus price target has climbed from its earlier yearly trough, projecting about 5% potential appreciation from a pivotal resistance level. In terms of valuation, PepsiCo’s P/E ratio has historically hovered around 25 times earnings, pointing to considerably greater upside potential. Projections extending to 2030 position PEP shares at roughly 15 times those future earnings, which could translate to up to 50% growth.

This pivot by analysts underscores the compelling value and income prospects, as PepsiCo trades close to the bottom of its historical P/E spectrum, paired with a dividend yield of 3.75% that sits near the upper boundary of its range. From a technical standpoint, the share price dipped to a longstanding uptrend line during 2025, activating a momentum signal that foreshadows consistent price appreciation throughout 2026.

AbbVie Uptrend Is Healthy and Intact

AbbVie Dividend Payments

• Dividend Yield: 2.88%
• Annual Dividend: $6.56
• Dividend Increase Track Record: 53 Years
• Annualized 5-Year Dividend Growth: 7.69%
• Dividend Payout Ratio: 496.97%
• Next Dividend Payment: Feb. 17

Activity among AbbVie’s analysts indicates that the recent fourth-quarter price correction is creating an attractive entry point for buyers. Data reveals over a dozen updates from 25 analysts, incorporating some downgrades, yet these were counterbalanced by upgrades and price target elevations, preserving the ongoing uptrend. The pair of downgrades shifted merely to Hold status, accompanied by price targets aligned with consensus; the bulk of updates reaffirmed positive ratings, boosted targets, and included two promotions to Buy.

The key insight is that AbbVie’s analyst following remains solid and consistent, with sentiment holding firm amid a climbing consensus price target, even accounting for varied opinions. The collective forecast anticipates roughly 10% upside, enough to eclipse prior record highs, supported by enduring business momentum.

AbbVie’s primary catalyst stems from its successful diversification beyond Humira dependency. The company now boasts a robust lineup of new top-selling drugs, a balanced product assortment, and a promising development pipeline to secure ongoing performance. Its dividend delivers an annualized 3.08% yield in December, embodying Dividend King caliber thanks to a strong financial position inherited from its Abbott Laboratories heritage.

United Parcel Service: High Yield With Limited Downside

United Parcel Service Dividend Payments

• Dividend Yield: 6.44%
• Annual Dividend: $6.56
• Dividend Increase Track Record: 16 Years
• Annualized 5-Year Dividend Growth: 11.17%
• Dividend Payout Ratio: 101.39%
• Recent Dividend Payment: Dec. 4

United Parcel Service shares carry certain risks, yet analyst sentiment trajectories help cap potential declines. Following the third-quarter results, tracking identified eight revisions across 30 analysts, demonstrating thorough oversight and confidence in the evolving outlook.

These updates validate the consensus target, which envisions 10% growth from essential support levels, including six upward target adjustments and one upgrade. The prevailing Hold consensus now carries a bullish undertone, with the price target trajectory surpassing consensus expectations. Reaching $110 would suffice to initiate a confirmed technical turnaround in the current environment.

Price dynamics are supportive for this high-yielding 6.5% stock. The shares established a floor in the fourth quarter before recovering, reclaiming footing at a convergence of moving averages. This vital zone underscores accumulation by short-term traders and long-term holders alike, implying alignment across market participants. Under these conditions, UPS could validate its reversal shortly and sustain upward trajectory into 2026.

Key Points

• PepsiCo is well-situated to generate enduring value as it approaches the upper limits of its historical P/E range, with analysts emphasizing substantial growth prospects.
• AbbVie has successfully transitioned past its Humira reliance, establishing a foundation for ongoing expansion and reliable dividends, as analysts sustain optimistic views.
• United Parcel Service seems to have reached its nadir and is navigating a reversal pattern, providing a 6.5% yield in December while analysts constrain downside risks and project upside potential.

Companies Mentioned in This Article

• PepsiCo (PEP): MarketRank 4.417 of 5 stars, Current Price $148.16, Price Change -0.8%, Dividend Yield 3.84%, P/E Ratio 28.17, Consensus Rating Hold, Consensus Price Target $158.75
• AbbVie (ABBV): MarketRank 4.297 of 5 stars, Current Price $227.44, Price Change 2.1%, Dividend Yield 2.88%, P/E Ratio 172.30, Consensus Rating Moderate Buy, Consensus Price Target $245.84
• United Parcel Service (UPS): MarketRank 4.5358 of 5 stars, Current Price $101.93, Price Change -0.1%, Dividend Yield 6.44%, P/E Ratio 15.75, Consensus Rating Hold, Consensus Price Target $110.09