Quick Thoughts Heading Into 2Q EPS

Research evidence excerpt

Quick Thoughts Heading Into 2Q EPS

Idea

July 20, 2026 10:14 AM GMT

Morgan Stanley & Co. LLCMConsumer Staples | North America Dara Mohsenian, CFA

Equity Analyst

Quick Thoughts Heading Into Dara.Mohsenian@morganstanley.comEric A Serotta, CFA +1 212 761-6575

Eric.Serotta@morganstanley.com +1 212 761-2370

2Q EPS Patty Kanada, CFA

Patty.Kanada@morganstanley.com +1 212 761-1019

KO/PM/MNST/CL remain our favorite long-term picks, with Josh Haubenstock

outsized sustained OSG vs peers in our minds. Short term, with ResearchJosh.Haubenstock@morganstanley.comAssociate +1 212 761-1059

Q2 EPS, we see KO/CHD/EL/PM as favorable trades, and are Kenneth Tan

more cautious ST on HPC at CLX/PG/CL. ResearchKenneth.Tan@morganstanley.comAssociate +1 212 761-4954

Favorite Long-Term Ideas: Our top ideas longer-term in beverages/household Beverages

products/tobacco as laid out in our June slide show here include Coca-Cola, Philip North America

Industry View Attractive

Morris International, Monster, and Colgate, with Colgate moving down in rank order

(but still our preferred HPC play) as many of the key positives in our January note

"OW; Moving to Top Pick in HPC with Potential Inflection in OSG Above Peers in

2026 and Solid EPS Visibility" are more priced in with the stock up almost 20% YTD.

Please see the individual company sections below for our LT thesis on each name.

Short-Term Positive Trades: Short term, for Q2, we like Coca-Cola here, with

expected Q2 OSG/EPS upside, and strong momentum in July early in Q3, with solid

underlying LT fundamentals boosted ST further by World Cup benefits in June/July,

hot weather in Europe in June/July, and continued Coke share gains, along with a

more benign competitive environment. Fairlife's production stoppage post cyber