Loading...
Loading...
Deutsche Bank is out with its "Elasticity" update today and comments on the following markets:
Packaged Food: Some Surprising Changes
Categories where elasticity increased noticeably vs. 3 years ago include fresh
bread, gum, chocolate, and yogurt. These observations tend to support our cautious view on Flowers
FLO, Kraft
KFT, and Hershey
HSY while giving us one reason General Mills'
GIS stock has underperformed. These companies are likely considering higher prices given cost inflation for wheat, sugar, cocoa and dairy. Meanwhile, one category with lower elasticity was spice & seasonings, supporting our positive outlook on McCormick
MKC and its ability to efficiently pass on higher cost.
Household & Personal Care: Up Is Down
Surprisingly, household products, where private label has expanded and
commodity driven price increases have been the highest, actually saw a decrease in elasticity since 2007. Personal care, where elasticities are lowest and purchases less frequent, actually saw the biggest percentage increase in elasticity, albeit at a much lower base. Still, the lower the elasticity the better, and P&G
PG and Colgate
CL have the most exposure to these categories, with Clorox
CLX and Kimberly
KMB, with falling elasticity, seeing the most volume pressure from pricing increases.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Loading...
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
---|
Benzinga simplifies the market for smarter investing
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Join Now: Free!
Already a member?Sign in