PepsiCo’s(PEP) efforts to reinvigorate top line growth in North America showed some initial signs of progress, but trends came under pressure for most of May and into early June, UBS Securities said in a note Wednesday.
It is unlikely that PepsiCo Foods North America could return to historical growth rates, the brokerage said. While the negative investor sentiment is not surprising, UBS said the argument that PepsiCo(PEP) should trade closer to other packaged food peers is overblown, as the company still has a credible path to delivering organic revenue and earnings growth.
The brokerage lowered its Q2 and 2026 earnings per growth forecasts to $2.18 and $8.56 respectively, from $2.21 and $8.60, to reflect weaker performance in PFNA, as well as shifts in commodities and currency.
Despite weaker consumption, analysts said the base case expectation is for PepsiCo(PEP) to maintain its 2026 guidance when it reports its Q2 results on July 9.
UBS Securities lowered its price target on the stock to $172 from $186, while keeping a buy rating.
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