PepsiCo Faces Earnings Pressure Amid Persistent North America Weakness, Morgan Stanley Says
PepsiCo (PEP) is likely facing earnings pressure after it indicated that its bottom-line may close out fiscal 2026 at the low end of the outlook amid continued weakness in North America, Morgan Stanley said in a client note emailed Friday. The beverage and snacks giant on Thursday reported stronger-than-expected second-quarter results, even though soft consumer spending in the US weighed on its North American performance. PepsiCo said it continues to project core per-share earnings to rise by 5% to 7% for fiscal 2026. During a conference call with analysts, Chief Financial Officer Stephen Schmitt said the company may be headed toward the low end of the EPS guidance, amid expectations for the North American business to improve at a slower pace than previously anticipated, according to a FactSet transcript. Refunds from tariffs paid last year could offset some commodity pressures, Schmitt said on the Thursday call. The company continues to expect its international business to remain strong in the second half. "We see building signs of EPS risk looking out to 2027," Morgan Stanley wrote in its note. "We worry that (PepsiCo) will need to reset EPS in 2027 with greater spend to.
PepsiCo (PEP) is likely facing earnings pressure after it indicated that its bottom-line may close out fiscal 2026 at the low end of the outlook amid continued weakness in North America, Morgan Stanley said in a client note emailed Friday.
The beverage and snacks giant on Thursday reported stronger-than-expected second-quarter results, even though soft consumer spending in the US weighed on its North American performance.
PepsiCo said it continues to project core per-share earnings to rise by 5% to 7% for fiscal 2026.
During a conference call with analysts, Chief Financial Officer Stephen Schmitt said the company may be headed toward the low end of the EPS guidance, amid expectations for the North American business to improve at a slower pace than previously anticipated, according to a FactSet transcript.
Refunds from tariffs paid last year could offset some commodity pressures, Schmitt said on the Thursday call.
The company continues to expect its international business to remain strong in the second half. "We see building signs of EPS risk looking out to 2027," Morgan Stanley wrote in its note. "We worry that (PepsiCo) will need to reset EPS in 2027 with greater spend to.