Frank Curzio
Founder & CEO of Curzio Research, Wall Street Unplugged Host
PepsiCo is under pressure because consumers can no longer really afford a can of soda, as the company cut its profit outlook citing a slower North American recovery. The stock is approaching its monthly 200-period moving average, a secular bear-market line that breaks only during economic depressions. If it breaks, $75 is the next level. x.comÂ
Boston Beer is probably the easiest short: its top line is shrinking by high single digits while it trades at 25 times earnings. x.comÂ
Rising freight and oil costs threaten consumer staples margins, with plastic a significant input, while a weakening consumer adds trade-down risk. That makes chasing the recent bid for staples unattractive. x.comÂ
Consumer-facing stocks remain vulnerable as even middle and upper-middle income shoppers pull back. Dave & Buster's fell 15% on ongoing "entertainment weakness", dragging the sector including Texas Roadhouse. Dollar General said at a Goldman conference that customers across income cohorts are somewhat distressed, with middle to upper-middle shoppers acting like lower-income ones. Diesel near $7 and gasoline near $4.50 add about $700M a day in fuel costs versus a year ago. x.com x.com x.com x.com … Show more
Molson Coors is a pretty good business priced far too cheaply at 8.5x 2027 earnings, with well-structured, well-termed debt. The stock is suppressed because it is a consensus funding short, and terminal-risk concerns should evaporate as the market eventually agrees, as long as management avoids bad M&A. x.comÂ
Molson Coors' terminal decline in beer sales looks priced in, so returns from current levels should be fine, backed by a 4.5% dividend easily covered by cash flow. x.comÂ
Coca-Cola looks like a great funding short, since nothing makes it immune to the risks that battered its staples peers. GLP-1 drugs, store brands, new entrants and supply-chain inflation should hit it too, and non-sugar drinks only slow the U.S. decline, though international has held up better. About 2% revenue growth is thin support for 25x earnings while peers sit at 2008 valuations; it could fall to 15x unless the other staples rebound dramatically. x.com x.com x.com x.com x.com x.com x.com … Show more
Coca-Cola looks like a short at about 25x forward earnings for a business growing revenue slower than nominal GDP. All of its recent earnings growth has come from cost efficiencies, and it should face huge headwinds from the appetite-suppressing drugs people are taking to stop eating. x.comÂ
PepsiCo faces a death spiral as GLP-1 drugs shrink snack volumes while it raises prices. Per @wallstengine, citing Bloomberg, PepsiCo plans to lift prices on select chips, soda and dips by year-end or early 2027, months after cutting snack prices by up to 15% to revive demand. North American food revenue fell 2% last quarter on flat volumes. Less volume and higher prices together will destroy the snack companies. x.comÂ
Jack in the Box, Wendy's and Papa John's could all go bankrupt as fast-food prices outrun what consumers will pay. Customers are pushing back or finding comparable value at chains like Chili's. Freight costs from diesel and trucker shortages, plus rising food costs, will squeeze margins. Menus likely need to reset lower, which is hard while input costs climb, and GLP-1 drugs also hurt volumes. Some may be acquired instead, and a few could offer select opportunities as prices reset. x.comÂ