11:11 AM EDT, 10/02/2025 (MT Newswires) -- PepsiCo ( PEP ) is expected to report another difficult quarter as topline performance in North America continues to show signs of weakness, particularly in the snacks segment, RBC Capital Markets said in a note Thursday.

The company is scheduled to report Q3 results on Oct. 9.

Analysts, including Nik Modi, said while recent headlines surrounding the company have largely focused on bottler refranchising, cost-cutting initiatives, and asset divestitures, largely prompted by Elliott Management's recent activist investment, these topics are secondary to a more pressing issue, which is the underlying growth challenges within Frito-Lay North America.

This division's main issues are price points, under-indexed to growing parts of the snacking wheel, and a lack of exposure to protein, the analysts said, adding that these issues will require time, capital, and strategic reinvestment to address, and these efforts could put pressure on future earnings per share and returns on capital.

The analysts said that for 2026, their EPS projections are below consensus expectations. They expect full-year revenue of $96.1 billion, and adjusted earnings per share of $8.47.

"We acknowledge [PepsiCo ( PEP )] shares appear inexpensive on a historical basis but we are looking for continued delivery and further volume improvements in North America for valuation to move higher," the analysts said.

RBC maintains sector perform rating and $145 price target on PepsiCo ( PEP ).

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