Market Realist Consumer Sector Weekly: June 12–16, 2017
Key news that shook the consumer sector in the week ending June 16 was Amazon’s (AMZN) $13.7 billion acquisition of Whole Foods Market (WFM).
The majority of analysts covering Colgate-Palmolive (CL) continue to have a neutral stance on the stock.
Colgate-Palmolive’s (CL) productivity and cost reduction program have largely powered the company’s increase in profitability as sales remained soft amid challenges.
Colgate-Palmolive (CL) is witnessing sluggish sales in its developed markets, which include North America and Europe (excluding Central Europe).
Emerging markets have been a key growth engine behind Colgate-Palmolive’s (CL) growth in the recent past.
Year-to-date, Colgate-Palmolive (CL) stock has generated a return of 15.7% as of June 13, 2017, and has outperformed the broader index significantly.
As of June 9, 2017, Church & Dwight (CHD) was trading at a 12-month forward PE multiple of 27.4x, which is higher than those of its peers.
In its last quarter, CHD’s adjusted gross and operating margins expanded 110 basis points and 170 basis points to 45.7% and 22.8%, respectively.
The majority of analysts covering the select group of consumer product companies we’re discussing in this series have maintained a neutral stance.
Consumer product companies exceeded Wall Street’s estimates during their last reported quarters, thanks to cost-saving measures.
Clorox (CLX) keeps outperforming peers with industry-leading sales growth.
The shares of Clorox (CLX) and Church & Dwight (CHD) have outperformed peers after reporting their most recent quarterly results.
To drive its sales, Altria introduced three new flavors of Mark Ten in April 2017.
As of June 9, 2017, Altria Group (MO) was trading at $75.46.
For the next four quarters, analysts are expecting Altria (MO) to post revenue of $19.8 billion, which represents a growth of 2.3% from $19.4 billion in the corresponding period last year.
During the next four quarters, analysts are expecting Altria Group (MO) to post EPS (earnings per share) of $3.37.
As of June 9, 2017, Altria Group (MO) was trading at $75.46, a growth of 6.6% since the announcement of its 1Q17 earnings on May 2, 2017.
The tobacco sector outperformed broader markets during the last ten years. Tobacco giant Philip Morris (PM) returned 262.4% in the last ten years.
The S&P 500 Index (SPY) (SPX-Index) fell 0.3% in the week ending June 9. Leading technology stocks like Facebook (FB) and Amazon (AMZN) fell on Friday.
The S&P 500 Index (SPX-Index) (SPY) finished the week ended June 2 on a positive note with a ~1.0% gain despite a weaker-than-expected jobs report for May.