Should You Buy Pepsi Stock Before April 16?

First-quarter earnings season is ramping up, and while financial services companies are currently taking center stage and investors are eagerly awaiting reports out of the technology sector, some of the largest consumer staples companies are also in the earnings on-deck circle.

That includes PepsiCo (NASDAQ: PEP), which is scheduled to report before the market opens on Thursday, April 16. Analysts are expecting the Doritos maker to deliver earnings per share of $1.55 on sales of $18.93 billion.

Ahead of its earnings report, PepsiCo may be worth raising a glass to. Image source: Getty Images.

Narrowly trailing rival Coca-Cola, Pepsi stock is up about 8% year to date. That's good work in three months and change, putting the beverage giant well ahead of broader baskets of consumer staples names. Pepsi's 2026 bullishness may also signal that the shares are buy-worthy heading into Thursday's earnings report. Still, investors not holding the stock today should do some homework before committing.

Investors have questions. Pepsi better have answers.

Consumer staples stocks are usually considered low-volatility fare. While PepsiCo isn't overly volatile, options markets are pricing in a 4.3% post-earnings move, though that's below the average of 5.4% over the past four quarters. Prospective investors should assess if those percentages are "too hot to handle" within the confines of their personal risk tolerance.

If the answer is yes, there's nothing wrong with waiting a day or two to get involved with this famed beverage stock. For those buying or holding Pepsi into earnings, they're right to demand the company provide some clarity, hopefully positive, on its pricing strategy. In February, Pepsi announced plans to reduce prices on some of its iconic snack brands, but that was after it raised prices on Cheetos, Doritos, and other labels, chasing away some cost-conscious consumers and costing the company billions in lost sales.

Something else investors should keep an eye on is any commentary on efforts to improve the ingredient profiles of its famous brands, including Gatorade, Quaker, Tostitos, and others.

This isn't a minor issue, because it's a two-front battle for consumer packaged goods companies. First, the federal government is leaning on these companies to use healthier ingredients. Second, consumers are demanding it, too. They may want sports drinks and chips, but they're not going to indulge if they think they're buying sugar water or gobs of salt. Pepsi could go a long way toward allaying investor concerns if it shows it's threading the needle between healthier products and sales growth.

Focus on financials

Earnings reports are ideal times for companies of all stripes to articulate their financial story to the investment community, and Pepsi may be able to give investors something to cheer about on that front because free cash flow could jump as much as 40% this year.

The carbonated soft drink maker had $9.5 billion in cash on hand at the end of last year. Expansion of that figure in the first three months of 2026, even if just incremental, gives market participants another reason to get on board.

After all, there's a 54-year dividend-increase streak to extend and shares to repurchase.

Todd Shriber has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.