PepsiCo to release earnings report with Bank of America maintaining…

Bank of America Securities recently released a research report on PepsiCo, maintaining a “neutral” rating for the company with a target price of $150. The report highlighted that while PepsiCo is facing profit pressure, this has been offset by lower corporate expenses and tax rates. The North American food business sales were reported to be lackluster following the end of promotional activities last summer, while the data for the North American beverage business appears to be normal overall. Further distribution updates are expected from Celsius Holdings.

PepsiCo is scheduled to release its Q3 2025 fiscal year earnings report on October 9, following the end of its fiscal year on September 6. Bank of America Securities has maintained its earnings per share forecast at $2.26 for Q3, while adjusting their model to account for various factors. These adjustments include a decline in gross margin due to tariff impacts, with plans to implement mitigation measures in the next quarter. There have also been reductions in corporate expenses and an effective tax rate to counteract these impacts. The organic sales growth forecast for the Latin American franchise business has been revised to flat, leading to a slight reduction in overall organic sales growth for Q3.

Despite these adjustments, further revisions to sales or earnings per share are unlikely, as the quarter seems to be performing in line with expectations. However, there has been little improvement or acceleration in the core businesses of PepsiCo, such as the North American food segment, which has kept market sentiment subdued.

Nielsen data shows that PepsiCo’s sales figures for Q3 remained relatively unchanged compared to previous periods. Sales for Frito-Lay were affected negatively by comparisons related to promotional activities, while Quaker continued to perform well. Mid-tier brands at Frito-Lay experienced a decline in sales, with premium and value brands showing stronger performance.

In the North American beverage business, zero-sugar products have seen strong performance, while brands like Mountain Dew have faced declining sales. Additionally, intentional volume reductions have impacted the performance of Aquafina. Bank of America is still awaiting discussions regarding PepsiCo’s updated distribution agreement with Celsius Holdings, which was announced in August.

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