PepsiCo Faces EPS Decline Amidst Analyst Optimism

PepsiCo is set to report Q1 earnings, with EPS expected to drop 6.2%. However, analysts remain moderately bullish, considering the company’s capacity to beat estimates previously.

Date: 10-04-2025

AI Rating: 6

Market Overview: PepsiCo, Inc. is scheduled to unveil its first-quarter results soon, with analysts predicting a decline in non-GAAP EPS by 6.2% from $1.61 to $1.51. While this may be viewed negatively, the company has consistently exceeded EPS expectations over the past four quarters, which provides a glimmer of hope for investors.

EPS is a crucial metric for assessing profitability, and a projected decline may raise concerns about revenue growth and profitability margins. However, an expected EPS of $8.27 for the full fiscal year 2025 shows only a modest growth of 1.4%. Analysts anticipate further growth in fiscal 2026, with EPS rising by 6.4% to reach $8.80, indicating a potential rebound.

Revenue Insights: The report also indicates the ongoing difficulty in demand, which has negatively impacted both beverage and food volumes. This was reassured by an earlier reporting period where overall revenue dropped 24 basis points to $27.8 billion, somewhat disappointing in relation to expectations. Even though the non-GAAP EPS saw an increase, the fall in topline revenue could suggest underlying issues with profit margins.

Investor Sentiment: Despite the challenges, a moderately bullish consensus from analysts indicates that many believe in PepsiCo's long-term potential. There is a significant upside potential estimated at 11.3%, which could appeal to investors looking for resilient stocks during a volatile period.

In conclusion, while EPS expectations present short-term challenges, the underlying growth prospects and favorable analyst opinions could buffer against sharp declines in stock prices as investors weigh both historical performance and future potential.

Stocks: PEP