PepsiCo Inc (NASDAQ:PEP, XETRA:PEP) is expected to report largely in-line first-quarter results later this month, with investor attention focused on geopolitical risks and early signs of a turnaround in its North American foods business, according to analysts at Bank of America.
The brokerage said it expects results to come in broadly in line with consensus estimates, though it flagged three key areas for investors to watch: the operational impact of heightened geopolitical tensions in the Middle East, progress on the affordability-driven turnaround within PepsiCo Foods North America (PFNA), and updates on growth initiatives at PepsiCo Beverages North America (PBNA).
Bank of America has adjusted its expectations for PepsiCo’s cost structure, now forecasting a lower effective tax rate in the first half of the year alongside heavier growth in selling, general and administrative expenses during the same period.
Early signs of improvement are emerging in the PFNA segment, which remains in the “early innings” of its turnaround, according to analysts. Data from NielsenIQ showed sequential improvement in the first quarter, with sales trends turning positive after a decline in the prior quarter. The gains were supported in part by winter storm-related demand and early price reductions on key brands.
Volumes improved for flagship snack brands including Lay’s, Ruffles and Doritos, though Tostitos has yet to see a similar pickup, the analysts said. The next test will be whether momentum continues through spring shelf resets and into the peak summer holiday season.
In beverages, trends at PBNA remain steady but lack clear acceleration. Bank of America said performance has been mixed across brands, with core Pepsi continuing to lag the broader cola category, while Pepsi Zero Sugar showed solid growth and Mountain Dew posted sequential improvement.
The firm added that gains from energy drink partnerships such as Alani Nu and Celsius are being partially offset by a reduced emphasis on case-pack water, a headwind expected to persist into the second quarter.
Overall, the analysts said PepsiCo’s near-term outlook hinges on execution in North America and its ability to navigate external pressures, particularly geopolitical volatility.
The beverage and snacks giant is scheduled to release its quarterly results on April 16. Bank of America maintained its earnings per share forecast of $1.53 for the quarter and $8.60 for fiscal 2026.