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In a note released Tuesday, UBS analyst Stephen Powers compared pre-recession performance in the Home & Personal Care and Beverages sectors to current challenges facing these companies.
Before the 2008 recession, companies in the HPC and beverage groups were, “simple, profitable, and highly cash-generative businesses,” as well as optimistic about “ever-rising consumption” from emerging markets, according to Powers.
Moving to present day, Powers sees the following challenges:
- “Developed market growth is likely to remain slow and price-competitive,
- Emerging market growth is also likely to face structural challenges, and
- External forces (e.g., regulation, taxation, commodity/FX volatility, new technologies, channels shifts, etc.) are going to make the operating environment consistently more complicated.”
Powers is a buyer of Estee Lauder
EL,
Monster BeveragesMNST, Church & Dwight
CHD, and Colgate-Palmolive
CL. Powers is staying on the sidelines on
Proctor & GamblePG,
PepsiCo PEP,
Coca-ColaKO, Coca-Cola Enterprises
CCE, and Dr Pepper Snapple
DPS. He is recommending investors sell shares of Energizer
ENR, Avon Products
AVP, and Clorox
CLX.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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