Coke’s stock trading above $58 fair value estimate as long-term view unchanged.
The firm boasted 13% organic revenue growth.
There's still plenty of pent-up demand for travel and leisure stocks; quick-service restaurants also look relatively attractive.
With investors favoring the sector to help ride out the market storm, only 35% of consumer defensive stocks we cover are undervalued.
We expect to lower our fair value estimate to $83 per share.
The combination of skyrocketing prices throughout the grocery store and gas pump plus mounting interest rates could prompt trade down to lower-priced alternatives.
Strong brands are in the best position to weather any challenges.
More than half of the stocks in the sector trade at 4 or 5 stars.
We do not expect to change to our fair value estimate for Coca-Cola, and expect minimal change to Pepsi's FVE.
The fourth quarter marked the first since the pandemic that away-from-home volumes exceeded 2019 levels.
Inflation and supply chain shortages put pressure on the wide-moat company.
Despite supply chain constraints, rising labor costs and new variants, we still see value in the consumer cyclical space.
The market underappreciates consumer packaged goods manufacturers.
We think this performance is a testament to the strategic course it has been trekking over a multiyear horizon--anchored in increasing investments in its capabilities and brands.
The beverage company acquired BodyArmor for $5.6 billion.
This wide-moat company served up a solid start to the fiscal year.
Profits cooled in the period, as supply chain disruptions and inflationary headwinds took a toll.
We expect consumers to begin spending more on experiences, such as travel.
Heavy competition will persist, so strong brands with pricing power are best positioned.
Our $83 fair value estimate is unchanged.
The company did so even against pronounced inflationary headwinds.
Tobacco still looks undervalued.
We see pockets of opportunity in powersports companies that have benefited from people's desire for outdoor activities while social distancing.
P&G intends to raise prices across its U.S. baby, feminine, and adult incontinence segments.
Consumer cyclical stocks are overvalued.
We're keeping an eye on online grocery shopping.
We intend to hold the line on our long-term expectations for 4% annual sales growth and operating margins in the mid-20s for the wide-moat company.
And one stock we like.
Aside from auto and restaurant subindustries, the sector looks fully valued.
Alcohol and tobacco still present the biggest opportunities.
We intend to edge up our $111 fair value estimate, but we don’t believe investors should rush to stock up on this wide-moat name.
In the somewhat frothy consumer defensive sector, alcoholic beverage producers look cheap.
Alcohol and tobacco stocks are trading at the greatest discounts to our fair value estimates.
We expect car and local travel to rebound before international and air travel.
We see little in the results to warrant a material change to our $48 fair value estimate for this no-moat company.
We think the company has the wherewithal to withstand impending pressures.
Here are two stocks that catch our eye.
Tobacco and alcohol look attractive.
Consumers are slowly starting to travel and eat at restaurants again.
We are maintaining our fair value estimate for this no-moat firm.
We don't expect to alter our fair value estimate or long-term outlook for the wide-moat firm, but we think investors should await a more attractive risk/return opportunity.
This no-moat firm is winning with consumers amid COVID-19, but we don’t think this growth will prove sustainable.
Constellation and Hostess both look promising.
Tobacco and beverage subsectors look particularly attractive.
Eighty percent of the sector is undervalued, trading at 4 or 5 stars.
The stock is trading well below what we think it's worth.
But the market continues to punish this wide-moat company, providing an attractive entry point for investors.
We are maintaining our $106 FVE.
We believe investors should await a more favorable entry point before buying shares of this wide-moat firm.
As the faltering firm works toward a turnaround, patient investors should consider its undervalued shares.