What Happened?
Shares of food and beverage company PepsiCo (NASDAQ: PEP) fell 4.1% in the morning session after the company reported mixed second-quarter results, with an earnings per share miss weighing on investor sentiment despite a revenue beat.
The food and beverage giant posted revenue of $24.18 billion, which was ahead of the $23.99 billion Wall Street expected. However, its adjusted earnings of $2.20 per share fell short of the $2.23 consensus estimate. While the company saw a welcome 1% increase in sales volumes compared to the prior year, other key metrics such as organic revenue growth also disappointed analysts. Overall, the earnings miss appeared to be the primary driver for the negative stock reaction, suggesting investors were hoping for a stronger performance on profitability.
After the initial drop, the shares shed some of the losses and rose to $137.42, down 3.7% from the previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy PepsiCo? Access our full analysis report here, it’s free.
What Is The Market Telling Us
PepsiCo’s shares are not very volatile and have only had 1 move greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock gained 7% on the news that the company reported second-quarter earnings that surpassed analyst expectations and raised its profit forecast for the full year.
The beverage and snack giant posted adjusted earnings of $2.12 per share on $22.73 billion in revenue. This performance exceeded Wall Street estimates, which had projected earnings of $2.03 per share on revenue of $22.28 billion. The better-than-expected results were driven by continued momentum in its international business and improving performance in North America. Looking ahead, PepsiCo improved its full-year 2025 guidance.
The company now anticipates a smaller negative impact from foreign exchange rates, expecting a 1.5% headwind compared to the 3% previously forecast. This adjustment led to an improved outlook for its core earnings per share, which are now expected to see a smaller decline of 1.5% for the year. The company reaffirmed its expectation for low-single-digit organic revenue growth.
PepsiCo is down 3.4% since the beginning of the year, and at $137.42 per share, it is trading 19.4% below its 52-week high of $170.49 from February 2026. Investors who bought $1,000 worth of PepsiCo’s shares 5 years ago would now be looking at only $919.29.
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