PepsiCo (PEP) continues to face a "tepid" sales environment in North America with data indicating slowing sales in Q2 for both food and beverage units from Q1, BofA said Friday in an earnings preview.
BofA lowered its Q2 earnings estimates on PepsiCo to $2.02 a share from $2.03, trailing the $2.06 consensus. If Q2 decremental margins are unchanged from Q1, operating margins may decline 375 basis points from a year earlier, the report said.
PepsiCo's international businesses may provide "a positive offset" with "a solid performance" in Latin American versus peers, the report said.
BofA lowered its price target on PepsiCo stock to $145 from $150 and maintained its neutral rating. The company is set to report Q2 results on Thursday.
PepsiCo shares fell 1% in recent Friday trading.
Price: 134.71, Change: -1.37, Percent Change: -1.01