A Glance at Key Updates in the Consumer Sector



Index’s impressive performance last week

So far in 2018, the S&P 500 Consumer Discretionary Index has risen 13.7%, outperforming the S&P 500 Index’s rise of 3.9% and the S&P 500 Consumer Staples Index’s fall of 9.7% on a year-to-date basis.

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Some key updates

On June 11, Newell Brands (NWL) announced an expansion to its stock repurchase authorization. The company is now authorized to repurchase $2.5 billion of its outstanding shares through December 31, 2019.

H&R Block (HRB) announced its fiscal fourth-quarter results after the market closed on June 12. The company’s revenue rose 2.8% YoY (year-over-year) to $2.3 billion, and its EPS rose to $5.4 from $3.7 YoY. Its revenue surpassed estimates by 2.3%, and its EPS exceeded estimates by 3.0%. Despite strong results, the stock fell 18.8% last week.

On June 12, SocGen downgraded the Brown-Forman Corporation (BFB) to a “sell” from a “hold” and cut its target price to $46.8 from $51.

On June 13, Credit Suisse downgraded the Hershey Company (HSY) to an “underperform” from a “neutral” and cut its target price to $80 from $90.

On June 13, Target Corporation’s (TGT) board of directors announced a 3.2% increase in its dividend to $0.64 per share. The increased dividend will be paid on September 10 to shareholders of record at the close of business on August 15.

In its global efforts to build a better supply chain, on June 14, Mondelēz International (MDLZ) announced that it had invested $200 million in its Opava biscuit-manufacturing facility in Europe since 2014. This facility employs close to 100 people and produces brands such as Oreo, Milka, belVita, and Cadbury for the European market.

On June 14, Citigroup downgraded Kohl’s (KSS) to a “neutral” from a “buy” and raised the stock’s target price to $75 from $71. The stock fell 4.8% last week.

Homebuilders’ stocks fell last week after the Fed announced a rate hike. Concerns were raised in the housing market that rising interest rates could take a toll on affordability for homebuyers. PulteGroup (PHM) fell 6.7%, D.R. Horton (DHI) fell 3.1%, and Lennar Corporation (LEN) fell 2.1% in the week.


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