Packaged Foods
This is the time of the year when strategists are busy sending out their annual outlooks. Here on the Global Investment Strategy team, we decided to go one step further. Rather than pontificating about what could happen in 2025, we decided to harness the power of the multiverse to tell you what did happen (in at least one highly representative timeline).
Next week, please join me for a Webcast on Tuesday, December 17 at 10:30 AM EST (3:30 PM GMT, 4:30 PM CET) to discuss the economy and financial markets.
And with that, I will sign off for the year. I wish you and your loved ones a very happy and healthy 2025. We will be back in the first week of January with our MacroQuant Model Update.
Which Countries Are Most Vulnerable To A Food Crisis…
Neutral Following up from last week’s report, we heed the message from our research to be wary of staples stocks at the depth of the recession and downgrade the S&P packaged foods index to neutral. Food & beverage store retail sales now garner 17% of total retail sales - a percentage…
Highlights Portfolio Strategy Our conservative dividend growth assumptions especially for the next three years – largely mimicking the GFC experience – result in an SPX 3,000 fair value target. Relative performance already reflects the jump in demand for packaged foods. A firm US dollar and…
Digging In To Packaged Foods…
Consumer staples stocks have been staging a recovery late in the year, buoyed by an exceptionally strong consumer. However, the S&P packaged foods sub-index has not participated in the rebound, held back by trade and currency headwinds in this export market-exposed sector. Still, we remain…
Overweight Not only have investors shunned consumer staples stocks in general, but the S&P packaged foods sub-index has also suffered, even trailing the broad staples sector. We are not willing to throw in the towel in this staples sub-index that offers hidden value. A number of leading…
Highlights Portfolio Strategy A rare buying opportunity has emerged in the S&P consumer staples index, especially for long-term oriented capital. The bearish story is already baked into current valuations, and industry green-shoots are flying under the radar. Similarly, the bearish…
The S&P packaged foods index has enjoyed a solid Q1 earnings season; results have bested forecasts, leading to some of the highest positive earnings revisions of the past decade (top panel). Robust demand growth, both domestic and international, combined with resilient pricing power (second…
This week has seen the beleaguered packaged foods index finally catch a bid, driven by exceptional earnings at two of the larger constituents, MDLZ and K. Both highlighted organic volume growth and a better pricing backdrop as the key drivers of top line outperformance. This corroborates with…