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Quarter-End Insights

Our Outlook for Consumer Defensive Stocks

We see continued margin pressures, emerging-market opportunities, spin-off acquisition targets, plus some pockets of value in the sector.

Erin Lash, CFA, R.J. Hottovy, CFA

Dec 28, 2011

Mentioned: Reckitt Benckiser Group PLC (RKT) , LVMH Moet Hennessy Louis Vuitton SE (MC) , Pernod Ricard SA (RI) , KKR & Co Inc (KKR) , Fortune Brands Home & Security Inc (FBHS) , Beam Inc (BEAM) , Kellogg Co (K) , Ralcorp Holdings, Inc. (RAH) , PepsiCo Inc (PEP) , Walmart Inc (WMT)

Margins are likely to remain constrained as commodity cost pressures persist.
A pronounced uptick in spending among developed-market consumers is likely several quarters off, but emerging markets provide an opportunity for growth.
Spin-offs could also become acquisition targets in 2012.

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Erin Lash does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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