PEP: PEP...North America...and Path - Deep-Dive

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PEP: PEP...North America...and Path - Deep-Dive

now estimate Q226 PFNA orgs -1% (was +2%) vs. Street +1% 2026E 1.61 A 2.14 E 2.38 E 2.38 E 8.50 E

and Q126 +1%. With that premise, we dug deep into PFNA trends. Key positives: 1) top Prior NC 2.18 E 2.39 E 2.40 E 8.56 E

categories have turned vols after multiple qtrs of declines; 2) innovations like Simply NKD 2027E 1.60 E 2.25 E 2.50 E 2.41 E 8.76 E

helping; 3) flavors > unflavored. Key realities: 1) category slower; 2) PEP price worsening Prior 1.62 E 2.32 E 2.55 E 2.45 E 8.94 E

(channel mix seems a factor amid worse food/drug/conv vs. club/other - see Exh 69); 3)

innovation is small + acquired growth (Siete) has slowed. Source:NA = NotCompanyAvailable,Data,NC =WellsNo Change,Fargo SecuritiesNE = Noestimates,Estimate and Factset.

Chris Carey#3 - NA Beverage deep-dive. We now estimate Q226 PBNA orgs -1% (was +2%) vs. Street

+2% and Q126 +2%. With that premise, we dug deep into PBNA trends. Key positives: 1) EquityChris.Carey@wellsfargo.comAnalyst | Wells Fargo Securities,| 212-214-6059LLC

brand Pepsi still slightly positive on a 2yr, even if negative y/y, with areas like Pepsi Max

Joe Lachky, CFAand Zero still strong; Mountain Dew is holding the line at ~flattish, better vs. the lows of Associate Equity Analyst | Wells Fargo Securities, LLC

2025. Key realities: 1) underperformance vs. category widest in at least 4 years, driven by Joe.Lachky@wellsfargo.com | 314-922-3635

soft drinks, albeit partly on tougher share comps. Marc Torrente, CFA, CPA

Equity Analyst | Wells Fargo Securities, LLC

Lower target, Equal Weight - stock not expensive, just tough to underwrite path. We Marc.Torrente@wellsfargo.com | 314-749-9940

lowered our target to $150 on 17x (was 18x) lower CY27e EPS. There is much noise in Eve Ticktin