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Quarter-End Insights

Our Outlook for Consumer Defensive Stocks

Modest pockets of value emerge among consumer defensive companies.

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  • Although we contend that a lower discount rate is warranted for a handful of the moaty consumer defensive firms we cover, we still believe the market’s longer-term growth assumptions remain slightly inflated.
  • Despite rumors to the contrary, we think smaller, strategic tie-ups rather than larger transformational deals will likely take top billing in the consumer defensive space over the near term.
  • The growing popularity of electronic cigarettes is both a threat and an opportunity for Big Tobacco.

 

Erin Lash has a position in the following securities mentioned above: PM. Find out about Morningstar’s editorial policies.