09:23 AM EDT, 09/03/2025 (MT Newswires) -- (Article updated to include PepsiCo's ( PEP ) response in the eighth and ninth paragraphs.)

PepsiCo's ( PEP ) shares rose on Tuesday as Elliott Investment Management urged the company to revamp its North American beverages and snacks businesses in a move that the activist investor said would unlock additional shareholder value.

Elliott, which holds a $4 billion stake in Pepsi, said that the owner of brands including its namesake cola, Lay's and Doritos is grappling with "poor" financial results and share-price underperformance.

Pepsi in July reported flat revenue for its North American beverage and food divisions during the first six months of 2025. The company at the time expected a low-single-digit increase in full-year organic revenue, compared with 2% growth in 2024.

Pepsi's share price was up 2.9% in Tuesday trade. The stock has lost nearly 12% in the past 12 months.

The fund manager proposed that Pepsi evaluate the potential refranchising of its North American bottling business, according to a letter sent to the company's board. The investor urged Pepsi to also review the beverage division's brand and stock keeping unit portfolio to reduce operational complexity.

Elliott called on the Pepsi board to streamline the food business' cost base and divest non-core and underperforming assets, according to the letter.

"By embracing the proposed actions, PepsiCo ( PEP ) possesses a unique opportunity to accelerate revenue and earnings growth and drive a meaningful valuation re-rating, which could deliver more than 50% upside to shareholders," Elliott Partner Marc Steinberg and Managing Partner Jesse Cohn said in the letter.

In a statement emailed to MT Newswires, Pepsi said it will review Elliott's proposals.

"PepsiCo ( PEP ) maintains an active and productive dialogue with our shareholders and values constructive input on delivering long-term shareholder value," Pepsi said.

Elliott demanded a clear action plan from Pepsi management, along with new medium-term financial targets.

"A sharper, focused and more competitive (PepsiCo Beverages North America) would be fully equipped to take back market share, accelerate revenue growth and deliver meaningful margin expansion," Steinberg and Cohn wrote. "And a leaner, stronger (PepsiCo Foods North America) would have greater flexibility to reinvest in proven brands with enduring consumer loyalty, while also delivering an attractive financial profile."