PEP · Q2 FY2026
PEPSICO INC Q2 FY2026 earnings analysis
By SageNoodle ResearchBullish
| Metric | Actual | Estimate | Result |
|---|---|---|---|
| Revenue | $24.18B | $22.73B (Q2 FY2025 yr ago) | Beat |
| EPS | $2.18 | $0.92 (Q2 FY2025 yr ago) | Beat |
| Free Cash Flow | $2.32B | $1.97B (Q2 FY2025 yr ago) | Beat |
| Gross Margin | 54.2% | 54.7% (Q2 FY2025 yr ago) | Miss |
| Operating Margin | 16.6% | 7.9% (Q2 FY2025 yr ago) | Beat |
What changed
Revenue increased 6.4% year over year to $24.18B, while EPS rose to $2.18 and free cash flow improved 17.8% to $2.32B. Operating margin recovered by 8.7 percentage points to 16.6%, although gross margin declined by 0.5 percentage points to 54.2%.
Impact on the investment thesis
There is no prior SageNoodle fair value to revise. We initiate a base-case fair value of $144.97 per share; the operating recovery supports the valuation, but weaker gross margin and the absence of updated guidance argue against assigning a larger premium.