Even though PepsiCo (PEP) shares are hovering near their 52-week low, analysts at JPMorgan clearly do not see this as an appealing buying opportunity.

JPMorgan analyst Andrea Teixeira downgraded PepsiCo from Overweight to Neutral on Tuesday, while also cutting her earnings forecasts for fiscal 2027 and fiscal 2028.

The veteran packaged food analyst is essentially signaling that PepsiCo's earnings report, due out in just a few weeks, could look quite ugly.

If that turns out to be the case, it would deal yet another major blow to the food giant.

PepsiCo had previously promised to deliver significantly improved financial results in the second half of 2026, relying on cost cuts, efficiency gains, and better product operations.

"The upcoming quarter may still show decent revenue and profit figures; international operations in particular could benefit from favorable weather conditions and a boost from the World Cup, putting in a strong performance," Teixeira said.

"But stripping out these one-time positives, and judging from channel tracking data and recent price increase announcements, the North American business trajectory is likely to keep falling short of management expectations."

"Despite multiple adjustment measures the company has taken, including recipe improvements, packaging updates, increased marketing spending, and price cuts and promotions, we believe PepsiCo's North American snack business (FLNA) remains lackluster. After the first quarter of 2026, the recovery momentum has stalled," she added.

"Hit by weak business performance combined with new logistics cost pressures, we believe PepsiCo will have to rely even more heavily on cost reduction and efficiency measures in the fourth quarter of 2026 if it hopes to meet the lower end of its EPS guidance range of 5-7% growth. Based on our current assessment, a sequential improvement in the North American business before year-end is unlikely."

PepsiCo's operational difficulties were already on display in its second-quarter earnings report released in July.

In the second quarter, PepsiCo posted revenue of $24.2 billion, up 6.4% year over year, beating Wall Street expectations; adjusted earnings per share came in at $2.20, largely in line with expectations but slightly below some analysts' forecasts.

The biggest market concern came from North America: consumers are cutting back on discretionary spending, snack volumes were flat, and beverage volumes fell 4%.

PepsiCo had previously cut prices on brands such as Lay's and Doritos to win back consumers, which weakened its pricing power and squeezed profit margins.

The core operating margin for the quarter fell 40 basis points year over year.

Management maintained its full-year guidance: organic revenue growth of 2-4%, and core earnings per share growth of 4-6% on a constant-currency basis.

But executives also warned that the recovery cycle for the North American business could be prolonged, and that there is upside risk to raw material cost inflation in the second half of the year.

PepsiCo shares have fallen 11.2% so far this year, badly lagging rival Coca-Cola, which has gained 24%.