PepsiCo (PEP) reports earnings before the open Thursday and investors will be looking for whether the iconic food and beverage manufacturer’s aggressive business overhaul is gaining traction.

Analysts are looking for earnings per share of $2.19 against last year’s figure of $2.12 (+3.30%) and for revenue of $23.85B vs. $22.73B year-over-year (+4.95%).

PepsiCo has made numerous strategy pivots recently, largely focusing on lower prices for consumers feeling the pinch and modifying ingredients. The company is phasing out artificial colors and flavorings, removing food dyes, and tweaking recipes to include simpler ingredient profiles in its many household names including Pepsi, Mountain Dew, Gatorade, Frito-Lay, and Quaker. Many of these same brands are also seeing price cuts as PepsiCo attempts to address lower volumes, as well as expanding more health-conscious lines such as SunChips and reducing portion sizes to entice health-conscious consumers.

Here are three things to watch for PepsiCo’s earnings this week:

• Outlook: Analysts have been more pessimistic about Pepsi in recent weeks. RBC Capital last week reiterated their hold rating with a $163 price target, saying they expect headwinds for PepsiCo due to a challenging macro environment stemming from high fuel costs and slowness in its domestic business. The firm lowered its estimate for PepsiCo’s organic sales growth to 2.8% from 3.2% as well as cut its annual adjusted earnings estimate to $8.55 per share from $8.60. Last week also brought price target cuts from UBS ($172 from $186, kept buy), Barclays ($144 from $158, kept equal weight), JPMorgan Chase ($170 from $178, kept overweight), and Bernstein ($142 from $143, kept market perform). Many other firms also cut their price targets on PEP during June.
• Technicals: PepsiCo is down about -16% from its 52-week high of $171.48 on Feb. 12. More recently, price has been traveling in a falling wedge-type shape since shortly after the last earnings event in mid-April, with the highs coming in around $160. Although last week’s price action resulted in a breakout and a small gap that has not yet been filled near $141, pre-earnings moves should be taken with a grain of salt as these quarterly reports can often result in major catalysts that can immediately rewrite the fundamental story of a stock. One notable downside area is near $135, as it represents an upside gap that formed after the Jul. 17, 2025 earnings that was filled only recently on Jun. 30 before price bounced upward again.
• Options Market: The potential expected move for PEP options in the weekly Jul. 10 expiration that will capture earnings comes in at about +/-5.8 (4.0%), so some volatility is possible before the week is through. Looking further ahead, the Aug. 21 expiration stands out. This is because the potential range comes in at about +/-11.2 (7.7%), which gives a lower boundary of $133.8 and suggests that traders are not looking for significant new movement beyond the recent lows near $135.