PepsiCo Inc (NASDAQ:PEP, XETRA:PEP) is expected to report first quarter 2026 results next Thursday before the market opens, with analysts at UBS expecting a largely in-line print but ongoing scrutiny around North American performance and the sustainability of recent improvements in trends.
UBS analysts wrote in a note that they expect the print itself to be broadly in-line with expectations, pointing to continued, modest progress in organic revenue growth.
At the same time, they caution that Pepsi is likely to face some external pressure, noting the company “is likely to face incremental pressures” from foreign exchange (FX) and input costs, which could add strain to margins even if top-line trends remain stable.
The outlook for guidance will also be closely watched. UBS expects the base case is for management to reiterate their fiscal year 2026 guidance, but they would not be surprised if a more cautious tone emerges given currency and inflation dynamics.
In particular, the analysts suggest that management could signal “that the lower end was more likely on the bottom line,” reflecting a more conservative stance on earnings despite the broader guidance framework remaining intact.
On growth, the company’s 2026 outlook currently calls for 2% to 4% organic revenue growth and 5% to 7% EPS growth, supported by a roughly 100bps FX tailwind.
UBS’ own estimates sit close to consensus, with 2.8% 2026 organic sales growth, versus the Street at +2.9%, and EPS of $8.55 versus $8.62 expected.
For the first quarter, UBS forecasts organic revenue growth of 2%, slightly below consensus at 2.1%, driven by a modest volume decline of 0.6% offset by price/mix of 2.6%.
The analysts expect international markets to remain the key driver, with growth of around 4.6%, while North America is expected to show only modest improvement at roughly 0.7%.
They noted that recent tracked data has shown signs of stabilization, with dollar takeaway for the 13-week period ending March 22 was roughly flat, an improvement from prior periods.
Investor focus, however, remains firmly on North America, where UBS highlights ongoing skepticism around whether pricing and innovation efforts can deliver sustained improvement.
The analysts acknowledged that “we can understand the skepticism,” but also argue that “trends having improved in recent weeks,” suggesting at least incremental progress even if a full recovery is not yet established.
Pepsi shares have fallen about 6% since the Q4 print, underperforming both the broader consumer staples sector and beverage peers, reflecting concerns around input costs, FX, and consumer pressure.
UBS maintained a ‘Buy’ rating on PepsiCo and a $186 price target, and argued that while sentiment remains cautious, positioning could leave room for upside if North American trends continue to stabilize.
Shares of Pepsi traded hands at $157 on Friday afternoon.