PepsiCo's (PEP) fiscal Q3 results were "marginally better than feared" amid a lowered bar, RBC Capital Markets said in a note Friday.

PepsiCo reported fiscal Q3 core net income Thursday of $2.34 per diluted share, up from $2.29 a year earlier. Analysts polled by FactSet expected $2.29. Net revenue for the fiscal quarter ended Sept. 5 was $25.27 billion, up from $23.94 billion a year earlier. Analysts expected $24.95 billion.

The beat was supported by strength in the company's international businesses as well as below-the-line tailwinds, RBC said.

Meanwhile, the company's "Q4 guide-down reflects rising commodity costs and sustained reinvestment needs that linger into 2027," the note said.

PepsiCo's domestic business is still the overhang, but management's "tone on refranchising was incrementally more open, a strategy we have long argued is the right long-term fix" for the company's North America beverage business, RBC said.

RBC kept PepsiCo's sector perform rating and $150 price target.

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