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Citi offered a bullish view of a number of consumer staples stocks after the bell on Thursday.
Procter & Gamble (NYSE:PG), Estee Lauder (NYSE:EL), and Colgate-Palmolive (NYSE:CL) were among new initiations, each at Buy. Equity analyst Filippo Falorni expects each of the names to remain resilient amidst an uncertain macro environment, with valuations remaining attractive.
“We believe PG’s strategic changes implemented over the past few years have driven a sustainably higher organic topline growth outlook and put the company in a better position to navigate through a challenging macro environment,” he told clients. “We also believe the market disappointment post FQ2 results offers an attractive entry point.”
Top line and margin recovery is expected at both Estee Lauder (EL) and Colgate-Palmolive (CL) as well. China’s reopening is also expected to benefit Estee Lauder specifically.
“After the negative impacts of China’s zero-COVID policy in late FY’22/FY’23 leading to large negative estimate revisions, EL’s key engines of growth (China, travel retail, skin care) are starting to gear up with the country’s reopening,” Falorni advised.
Meanwhile, Colgate was called an “under-appreciated margin improvement story in 2H’23 and 2024.”
Shares of each consumer products company rose modestly in after hours trading on Thursday.
Read more on Nelson Peltz’s move out of P&G during Q4.
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