PepsiCo IncPEP
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JP Morgan downgraded PepsiCo to Neutral and cut FY27/FY28 profit estimates on stalled North America recovery.
Impact on assets 3
Consumer Staples
JP Morgan analyst Andrea Teixeria cut her rating on PepsiCo to Neutral from Overweight on Tuesday, also marking down her profit estimates for fiscal year 2027 and fiscal year 2028. Teixeria said the upcoming quarter may still show a decent top- and bottom-line, helped by International performance on favorable weather tailwinds and a strong FIFA World Cup, but that excluding these non-recurring tailwinds, North America trends have likely continued to underperform management expectations. She noted that FLNA salty snacks performance has been lackluster despite ingredient reformulation, packaging changes, increased spend and lower prices, and that the recovery appears to have stalled following 1Q26. In its second quarter, PepsiCo reported revenue of $24.2 billion, up 6.4% year over year and above Wall Street expectations, while adjusted earnings per share came in at $2.20, roughly in line but slightly below some analyst estimates. North America was the biggest concern, with snack volumes flat and beverage volumes down 4%, and core operating profit margins fell 40 basis points year over year; management maintained its full-year outlook for 2% to 4% organic revenue growth and 4% to 6% core constant-currency EPS growth but warned the North American recovery may take longer. PepsiCo shares are down 11.2% this year, lagging rival Coca-Cola's 24% gain.
PepsiCo IncJP Morgan downgraded PepsiCo to Neutral and cut FY27/FY28 profit estimates on stalled North America recovery.
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