What Happened?
A number of stocks fell in the afternoon session after Iran peace talks collapsed pushing up expenses for packaged food companies.
Consumer staples companies, food, beverages, and household good, use oil and natural gas throughout their supply chain. Natural gas powers fertilizer plants, crude oil feeds packaging resins and shipping fuel, and vegetable oil prices track crude closely.
When oil rises, the cost of making and delivering every box of cereal and bottle of ketchup rises with it. For example, Kraft Heinz expects 4% input cost inflation this year with resin hedges expiring in mid-Q3. General Mills reported gross margins down 310 basis points in Q3 fiscal 2026, directly attributable to higher input costs.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Perishable Food company Tyson Foods (NYSE: TSN) fell 2.7%. Is now the time to buy Tyson Foods? Access our full analysis report here, it’s free.
- Personal Care company Inter Parfums (NASDAQ: IPAR) fell 4%. Is now the time to buy Inter Parfums? Access our full analysis report here, it’s free.
- Personal Care company Estée Lauder (NYSE: EL) fell 4.5%. Is now the time to buy Estée Lauder? Access our full analysis report here, it’s free.
Zooming In On Estée Lauder (EL)
Estée Lauder’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 10 days ago when the stock gained 5.5% on the news that the company reported first-quarter 2026 earnings that beat profit expectations and raised its full-year forecast.
The company posted adjusted earnings of $0.88 per share, easily surpassing analyst estimates of $0.65. Revenue for the quarter grew 4.6% year on year to $3.71 billion, which was in line with expectations. Investors were also encouraged by a 2% increase in organic revenue, marking a significant turnaround from declines in previous quarters.
Looking ahead, Estée Lauder increased its full-year adjusted earnings per share guidance to a midpoint of $2.40, signaling management's confidence in its continued momentum. This combination of a strong earnings beat and a positive outlook appeared to drive investor sentiment.
Estée Lauder is down 22.5% since the beginning of the year, and at $82.72 per share, it is trading 30.8% below its 52-week high of $119.61 from February 2026. Investors who bought $1,000 worth of Estée Lauder’s shares 5 years ago would now be looking at only $280.59.
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