What Happened?
A number of stocks jumped in the afternoon session after markets rotated into defensive names following the release of the May CPI report.
The headline 4.2% annual inflation reading spooked the market, but the breakdown matters: energy drove more than 60% of May's monthly price increase, while food at home rose just 0.1% and core inflation came in at only 0.2% for the month. For staples companies whose input costs are food, packaging, and household goods that is a margin reprieve.
The World Cup, which kicks off later in the week across U.S., Mexican, and Canadian host cities, added a near-term catalyst. Goldman Sachs has buy ratings on AB InBev, Constellation Brands, and Heineken specifically on tournament beer demand.
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:
- Shelf-Stable Food company Utz (NYSE: UTZ) jumped 2.4%. Is now the time to buy Utz? Access our full analysis report here, it’s free.
- Personal Care company Edgewell Personal Care (NYSE: EPC) jumped 3%. Is now the time to buy Edgewell Personal Care? Access our full analysis report here, it’s free.
- Household Products company WD-40 (NASDAQ: WDFC) jumped 2.7%. Is now the time to buy WD-40? Access our full analysis report here, it’s free.
Zooming In On Edgewell Personal Care (EPC)
Edgewell Personal Care’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 biggest move we wrote about over the last year was 10 months ago when the stock dropped 22% on the news that the company reported disappointing third-quarter financial results and cut its full-year outlook.
The consumer products maker posted third-quarter revenue of $627.2 million, a 3.2% decrease from the same period last year, missing analyst estimates. Adjusted earnings per share also came in below expectations at $0.92.
Edgewell pointed to a challenging Sun Care season, especially in North America, as the primary reason for the slump. As a result, the company lowered its full-year earnings forecast to approximately $2.65 per share, a significant reduction from its previous guidance. This combination of a quarterly miss and a weaker outlook for the year ahead prompted a sharp negative reaction from investors.
Edgewell Personal Care is up 25.8% since the beginning of the year, but at $21.22 per share, it is still trading 21.7% below its 52-week high of $27.10 from July 2025. Despite the year-to-date gain, investors who bought $1,000 worth of Edgewell Personal Care’s shares 5 years ago would now be looking at only $465.75.
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