To The Moon

$Coca-Cola(KO)$ $Pepsi(PEP)$ $iShares U.S. Consumer Staples ETF(IYK)$ 🍾🇺🇸📉 Coca-Cola’s cane sugar curveball: political pressure, margin shock, and an earnings coil primed to snap 📉🇺🇸🍾

Trump just dragged $KO into a high-stakes flavour war, and with earnings on deck, the stock is sitting on a loaded spring.

On 18Jul25, Donald Trump announced via Truth Social that Coca-Cola will return to using cane sugar in U.S. production. The company responded with deliberate ambiguity, teasing “innovative offerings” without confirming any actual change to its core formula. Despite the vagueness, markets reacted quickly. Corn refiners like $ADM and $INGR were hit on the demand shock for HFCS. $KO edged higher, but the real story isn’t price; it’s optionality, timing, and institutional positioning into earnings.

This isn’t a debate over sweetness; it’s a high-level recalibration of Coca-Cola’s input cost structure, brand positioning, and supply chain calculus, fuelled by political optics and unfolding in real time.

Earnings preview 🎯

• Earnings slated for 22Jul25

• Stock moved little post earnings in the past two years; average ±1.6%

• Options market now pricing ±3.6%, more than double the historical move

• $KO is +11.9% YTD, ranking #12 in the Dow

• Trading rangebound all summer, anchored by the 200DMA

• Analysts remain bullish: 22 of 23 rate Buy or Strong Buy, zero Sells

• 12-month consensus target implies a 12% upside from here

• Trump’s announcement has now become a pre-earnings wild card

If Coca-Cola confirms a formula change, or even hints at it in the earnings call, the margin structure of the business shifts. If they don’t, and earnings underwhelm, the stock could unwind rapidly as options volatility compresses and analysts reconsider lofty expectations.

Technicals 🔍

$KO is currently trading at $69.91 and sitting just beneath a dense cluster of short-term moving averages:

• MA5: $70.06

• MA10: $70.85

• MA20: $70.83

• MA30: $68.84

• IPO AVWAP: $71.76 remains unbroken

MACD has printed seven consecutive red histogram bars, with signal lines curling lower. RSI(6) sits at 44.01; weak and drifting. Volume has been underwhelming, reinforcing institutional indecision.

This is textbook coiling behaviour after a narrative shock. I’m watching for a clean break, either way, to confirm directional conviction.

Trading setup 📊

• A confirmed breakout above $71.76 reopens $74.38 and $76.03 as upside targets

• A failure to reclaim that zone and a break below $68.84 opens $66.00, then $63.20

• Low volume keeps this neutral, but rising implied volatility signals positioning ahead of a move

• Watch for MACD crossover and RSI divergence for early confirmation

• Options pricing implies explosive reaction; direction yet undefined

Market impact snapshot 🌾

• $KO: muted gain post Trump claim

• $ADM: -2.1% on reduced HFCS demand concerns

• $INGR: -1.7% intraday on exposure to corn refining

• Corn Futures: -0.1%

• IV on KO options: climbing steadily into earnings

Fundamental calculus 🍬

A shift to cane sugar in the U.S. would mark a reversal of a decades-long strategy:

• HFCS adoption was cost driven in the 1980s, supported by corn subsidies and sugar tariffs

• Cane sugar is 25 to 30% more expensive

• U.S. import quotas and tariffs inflate the premium further

• Coca-Cola would need to retool major portions of its domestic supply chain

• The Corn Refiners Association has warned of job losses and supply shocks

That said, there’s an undeniable branding opportunity:

• “Mexican Coke” with real cane sugar sells at a premium and has a cult following

• Millennials and Gen X consumers increasingly prioritise “clean label” ingredients

• Trump’s “Make America Healthy Again” rhetoric is clearly designed to win over a health-focused voter base

• Coca-Cola could reframe cane sugar as a premium upgrade, not just a formula tweak

Valuation context 🧮

• PE (TTM): 28.08

• Forward PE: 23.55

• Dividend Yield: 2.81%

• ROE: 38.78%

• Market Cap: $300.9B

These are fortress metrics; but if cost of goods sold spikes without pricing power, Coca-Cola’s legendary dividend stability could come under pressure, especially if volumes soften from a consumer price increase.

Chart psychology 🧠

This is where narrative meets capital flow. Institutions are clearly waiting. The chart’s telling me this is an options-led setup, and the coil will break on confirmation from earnings, either through direct commentary or inferred impact.

If Coca-Cola confirms a shift to cane sugar, the narrative becomes brand elevation and pricing power. If they don’t, but costs rise anyway or volume slows, we’ll see cracks in the dividend thesis.

Catalysts to monitor 🔥

• 22Jul25 earnings call: listen for product line changes, sugar sourcing commentary, or SG&A guidance

• Analyst reactions in the 48 hours post ER; if any shift to Hold or Neutral ratings occurs, it will hit fast

• Watch $CANE and $DBA for commodity ETF spillovers

• Trump’s narrative push may continue through campaign season; political volatility is now part of this trade

Conclusion 🚦

This is not a story about sweeteners; it’s a story about margins, political leverage, consumer psychology, and the hidden costs of rebranding a global beverage empire. $KO is trading flat, but it’s loaded with optionality. Trump’s post, combined with surging options pricing and a high-stakes earnings call, puts Coca-Cola at the centre of one of the most quietly consequential macro setups on the board.

The stock won’t stay quiet for long. And once this breaks, it’s going to move with velocity.

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Trade like a boss! Happy trading ahead, Cheers, BC 📈🚀🍀🍀🍀

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