On July 9, PepsiCo fell 4.41% in regular trading, trading at $135.93/share, with turnover of $255 million. The stock initially rose about 2% following its Q2 earnings release before rapidly erasing gains and turning sharply lower.

PepsiCo reported fiscal Q2 net revenue of $24.18 billion, beating the FactSet estimate of $23.95 billion, but core EPS of $2.20 missed the consensus estimate of $2.21 by $0.01. Management warned that input cost inflation in the second half will exceed first-half levels, with commodity pressures intensifying. North American business performance came in weaker than expected, with organic growth decelerating as inflation erodes consumer budgets.

CEO Ramon Laguarta highlighted that elevated oil prices tied to the Iran conflict are directly squeezing consumer spending on snacks, as gasoline expenses crowd out discretionary purchases. He indicated the company will attempt further price reductions to recapture price-sensitive customers, noting the outlook hinges on fuel costs. Multiple investment banks had previously cut their price targets, with Barclays lowering to $144, JPMorgan to $170, Citi to $170, and Wells Fargo to $150.

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