Yesterday’s market was a tale of two extremes - headline beats were plentiful, but the reactions painted a very divided picture.
On the positive side, PepsiCo $PEP was the clear standout. The consumer staples giant crushed expectations, with a clean double beat that sent shares up more than 7%.
What’s even more interesting is why - they are quietly leveraging AI to optimize supply chains, pricing, and even marketing campaigns. It’s a reminder that the AI boom isn’t just lifting tech stocks - even a snack-and-beverage empire is cashing in on the trend.
But healthcare weighed on sentiment. Abbott Laboratories $ABT, one of the largest medical device makers in the world, missed expectations and plunged over 8%.
Elevance Health $ELV fared even worse, sinking more than 12% after its bottom-line miss, its worst earnings reaction ever.
Financials were mixed. Regional banks like Citizens Financial $CFG managed slight gains on solid results, but U.S. Bancorp $USB and Fifth Third Bancorp $FITB slipped despite beating expectations.
The broader takeaway? Investors are rewarding truly exceptional reports while punishing any hint of weakness, no matter how defensive the sector.
Even a healthcare heavyweight like Abbott isn’t immune, while a consumer staple like Pepsi can rally as if it’s a tech stock when execution and innovation align.
It’s a stock picker’s market out there.
Here are the latest S&P 500 earnings stats 👇
*Click the image to enlarge it
Pepsi $PEP had a +5.19 reaction score after reporting a double beat.
They reported revenues of $22.73B, versus the expected $22.27B, and earnings per share of $2.12, versus the expected $2.03.
Abbott Laboratories $ABT had a -8.09 reaction score after reporting a double beat.
They reported revenues of $11.14B, versus the expected $11.06B, and earnings per share of $1.16, which met the market's expectations.
Now let's dive into the data and talk about what happened with these reports 👇
PEP had its best earnings reaction this century 🔥
PepsiCo rallied 7.5% after this earnings report, and here's why:
They are accelerating productivity initiatives focused on technology, AI, and data to optimize costs and drive efficiency.
Major acquisitions of Siete and Poppi were completed for $1.2B and $1.95B.
Management expects to return $8.6B to shareholders in 2025, with $7.6B in dividends and $1.0B in share repurchases.
Even Consumer Staples are benefiting from AI right now, and the market loves it.
Shareholders were rewarded with the best earnings reaction this century, and a textbook gap-n-go.
This big move marked the resolution of a multi-month consolidation, decisively marking the beginning of a brand-new uptrend.
So long as PEP stays above 137, the path of least resistance is higher for the foreseeable future.
ABT had its worst earnings reaction since 2016 🩸
Abbott Laboratories fell 8.5% after this earnings report, and here's why:
They're facing significant headwinds from COVID-19 testing, China Core Lab market, and U.S. HIV funding reductions.
Competition in the continuous glucose monitoring devices market is heating up, and the market thinks Abbott is falling behind.
Management declared a dividend of $0.59 per share, marking the 406th consecutive quarterly dividend and the 53rd annual increase.
This was drastically different than the Johnson & Johnson $JNJ earnings reaction on Wednesday.
The bifurcation in Healthcare isn't anything new, but this report reiterated that we need to analyze each company based on its own merits.
Price found resistance at the prior cycle's peak, and we expect the bears to continue holding that line.
If ABT is below 142, the path of least resistance is likely to remain sideways for the foreseeable future.
Thank you for reading.
- The Beat Report Team
P.S.: 🚀 See why the crypto market is headed to $10T—and how you can profit.
