PepsiCo's (PEP) North America business is seeing increased focus on innovation and affordability with an expectation to grow shelf space by double digits across retail channels, UBS said in a note Tuesday.

UBS said management expects shelf space gains to occur across both the main aisle and store perimeter, with variation by retailer.

The firm said PepsiCo reported a fiscal Q4 beat, supported by slightly stronger organic revenue and better gross margins, while reiterating its 2026 outlook.

For 2026, UBS said PepsiCo continues to guide for core EPS growth of between 4% to 6%, with foreign exchange expected to provide a roughly 100 basis point benefit. The company also continues to forecast organic sales growth of 2% to 4%, UBS said.

UBS maintained its buy rating on PepsiCo and raised its price target to $190 from $170.

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