Bank of America analysts have trimmed their earnings outlook for PepsiCo ahead of its second quarter results, citing softer-than-expected performance in the North American snacks business. The analysts lowered their fiscal 2026 earnings per share estimate to $8.61 from $8.65 and slightly reduced their second quarter forecast to $2.18 from $2.19, reflecting weaker performance at PepsiCo Foods North America and expectations that its recovery will take longer to materialize. Consolidated organic sales growth for the quarter is now expected at 2.9%, down from a prior estimate of 3.1%, while the full-year outlook was cut to 3.0% from 3.4%. International markets remain a bright spot, with second quarter organic sales growth forecast raised to 5.4% from 4.9%. The primary pressure point is PepsiCo Foods North America, where scanner data showed a sequential deterioration, with retail sales growth slowing to a 1.0% decline in the second quarter from 0.6% growth in the first, attributed to macroeconomic pressures, inflation, and unfavorable weather. Bank of America now expects flat organic sales growth for the division in the second quarter, down from a prior estimate of 1.5%, and reduced its full-year forecast to 0.2% from 1.4%. The analysts also lowered their price objective on PepsiCo to $164 from $173, based on 18 times estimated 2027 earnings, while maintaining a Neutral rating on the stock.
PepsiCo IncWeaker North American snack sales due to macroeconomic pressures, inflation, and weather, leading to lowered earnings estimates.
Bank of America Corp