Quick Comment: In-Line but Lower Quality 2Q; International Strength Offset by Continued US Softness

Research evidence excerpt

Quick Comment: In-Line but Lower Quality 2Q; International Strength Offset by Continued US Softness

Update

July 9, 2026 11:51 AM GMT

Morgan Stanley & Co. LLCMPepsiCo Inc. | North America Dara Mohsenian, CFA

Equity Analyst

Quick Comment: In-Line but Dara.Mohsenian@morganstanley.comEric A Serotta, CFA +1 212 761-6575

Eric.Serotta@morganstanley.com +1 212 761-2370

Lower Quality 2Q; International Patty Kanada, CFA

Patty.Kanada@morganstanley.com +1 212 761-1019

Strength Offset by Continued Kenneth Tan

Research Associate

Kenneth.Tan@morganstanley.com +1 212 761-4954

US Softness Josh Haubenstock

Josh.Haubenstock@morganstanley.com +1 212 761-1059

Reaction to earnings

PepsiCo Inc. (PEP.O, PEP US)

Unchanged In-line Largely unchanged

Beverages | United States of America

Impact to our thesis Financial results versus consensus Direction of next 12-month

consensus EPS Stock Rating Equal-weight

Source: Company data, Morgan Stanley Research Industry View Attractive

Price target $180.00

Shr price, close (Jul 8, 2026) $142.51

Muted Stock Reaction: PEP reported relatively in-line Q2 EPS and maintained FY Mkt cap, curr (mm) $195,324

guidance (overall and in every line-item) with international strength offsetting US 52-Week Range $171.48-132.96

weakness, but we would note the quality was slightly lower than expected in Q2

and cautionary mgmt. remarks for H2 in the US (albeit with int'l strength) along with

a shift in EPS growth to Q4. Net, results were OK given the low bar and worries

around the US heading into the quarter, but the results/H2 commentary signal US

woes are continuing (per PEP, "NA was softer than we anticipated in Q2, and we now

expect a more gradual improvement for the balance of this year"), which is the

market's biggest focus, albeit with stronger international results.