Tag: consumers
From shelves to carts: Path to recovery seen for key consumer stocks
Cautious optimism hovers over staple consumer stocks as the economy sees reprieve
Key Philippine consumer stocks stand to gain as price pressure eases, households become less pessimistic, and the central bank cuts policy rates.
Companies from food manufacturers to retailers will benefit as the economy sees more reprieve. Annual headline inflation slowed in September while data showed consumers’ outlook turned less sour.
The Bangko Sentral ng Pilipinas is also widely expected to continue reducing borrowing costs. Renewed optimism on the peso—buoyed by anticipated surges in remittances leading up to next year’s mid-term elections—should also help the consumer sector cover more ground.
These create a more favorable backdrop for most consumer goods heavyweights, helping increase their attractiveness for sector rotation.
A closer look at consumer staples
- Shops of Puregold Price Club, Inc. (PGOLD) will likely see increased foot traffic and higher spending, emerging as a beneficiary of easing inflation.
- Tailwinds are in place to support the share-price action of Century Pacific Food, Inc. (CNPF) following a 90-million-liter coconut water supply agreement with US-based market leader Vita Coco, riding on the global shift toward healthier drinks.
- Monde Nissin Corp. (MONDE), with its strong position in noodles and snacks, stands to gain from steady demand for affordable food options.
- Universal Robina Corp. (URC) may see some uptick in sales volume. Yet, guidance is to remain patient until spending picks up and commodity costs improve–coffee prices continue to soar, resulting in an overhang for the stock.
Takeaway
Earnings of consumer staples are expected to improve for the second half of the year compared to the same period last year.
Barring external risks including escalation of Middle East tensions, this positive momentum could extend in the fourth quarter. The consumer sector’s rating remains at slight overweight on the back of a still cautiously optimistic view for the sector at large.
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GERMAN DE LA PAZ III, CFA serves as an Equity Research Lead in the Investment Services Division of Metrobank Trust Banking Group. His coverage includes gaming, telcos, conglomerates, and utilities, as well as select offshore markets. Prior to joining the bank, he spent 9 years at Abacus Securities, starting as a Junior Investment Analyst and working his way up to Senior Investment Analyst. German holds a Bachelor’s degree in Humanities and a master’s degree in Industrial Economics from the University of Asia and the Pacific. Recently, he obtained his CFA charter and is currently pursuing additional industry certifications. In his free time, German enjoys playing sports, particularly basketball, and has a penchant for reading fiction books, watching suspenseful movies, and listening to music.
ARIZ MARCELINO is an Equity Research Analyst in the Investment Services Division of Metrobank Trust Banking Group. His local market coverage includes banks, consumer, and properties. Additionally, he monitors various sectors and investment themes in the offshore space. Previously, he was with the Markets Research Department, focusing on macroeconomic research and sector analysis. Ariz graduated from New Era University with a degree in Banking and Finance and has cleared the CFA Level 1 exam. He is a certified Financial Modelling and Valuation Analyst and a UITF Sales Person. Outside of work, he unwinds by watching popular sitcoms and anime series while enjoying a cup of hot matcha latte.
CHARLES RANDY LUMHOD is a Management Trainee in the Financial Markets Sector Training Program (FMSTP), currently assigned to the Equities Research Team in the Investment Services Division of Metrobank’s Trust Banking Group. In his current role, he provides analytical support across a broad range of sectors and themes. Charles holds a Bachelor’s degree in Business Administration, majoring in Financial Management, from the University of Santo Tomas, where he graduated cum laude. Moreover, he represented his school in both local and international finance-related competitions as a team leader, focusing on both equity research and fixed income trading. In his leisure time, Charles enjoys staying active by going to the gym and often unwinds at coffee shops to socialize.