Deutsche Bank analysts provided a preview of PepsiCo, Inc. (NYSE:PEP) ahead of the company’s upcoming Q2 earnings report (July 12), stating they remain broadly consistent with going in consensus EPS expectations of $1.74 on higher organic growth offset by lower operating margins.

According to the analysts, the company’s Q2 set-up appears challenging at the onset with record inflation pinching consumers across the US, EU, and Emerging markets, the cost environment (raw materials, freight/fuel, labor) remaining generally elevated, pockets of market share volatility seen recently across both Snacks and Beverages, as well as geo-political disruption and the most restrictive COVID lockdown in China (Apr-May) in 2-years.

The analysts also believe that USD appreciation intra-quarter may add to volatility to all-in results and guidance.