Pepsi is about to release its earnings report, but the market is only interested in the impact of diet pills.

The manufacturer of Fat Otaku Happy Water, PepsiCo, has been feeling completely unhappy lately. Investors are generally concerned that weight loss drugs will affect the sales of many junk foods, including cola. In the past six months, PepsiCo's stock price has fallen by nearly 12%, underperforming the market.

What will determine PepsiCo's stock price trend is the management's comments on the impact of weight loss drugs, not its performance. As PepsiCo's earnings report approaches, Wall Street expects that the company will mainly describe the impact of new weight loss drugs such as Ozempic on the conference call, rather than focusing on profits and losses.

From a fundamental perspective, PepsiCo doesn't have any problems. The market expects the company's Q3 revenue to be $23.4 billion, an increase of nearly $1.4 billion from the same period last year. Q3 earnings per share are also expected to reach $2.15, higher than $1.97 in the same period last year.

Wedbush analyst Gerald Pascarelli predicts that PepsiCo's performance this quarter is likely to remain stable. He pointed out that PepsiCo is a financially sound company and has been profitable in 21 out of the past 22 quarters.

However, Gerald Pascarelli also emphasized that in the past month, weight loss drugs have caused PepsiCo's stock price to fall by 9.8%. And this is still the case when these drugs are not widely used.

Investors are generally concerned that the increasing popularity of weight loss drugs will have a profound impact on the food and beverage industry, and food and beverage companies may have to adjust their product offerings to respond to changing consumer behavior.

As mentioned in a previous article by Wall Street News, Walmart US CEO John Furner recently stated:

"We confirm that consumers who are taking medication do indeed shop slightly less, buy slightly fewer items, and burn slightly fewer calories compared to the general population."

In August of this year, Morgan Stanley analysts wrote that weight loss drugs will impact many industries, including food and beverage, restaurants, grocery stores, and weight loss supplements. They predict that the number of people taking weight loss drugs will increase to 24 million within the next ten years, accounting for nearly 7% of the total US population.

The bank also stated:

"Given the direct impact of drugs on appetite suppression and calorie intake, the use of weight loss drugs may drive broad and lasting behavioral changes in a large population, which accounts for a significant proportion of food consumption."

Therefore, some market analysts suggest that PepsiCo's management needs to appease investors' emotions during the earnings conference call and present the potential impact of weight loss drugs in a way that is less worrisome to investors.