Stock Analysis & Ideas

2 Consumer Goods Stocks to Consider for Your Smart Portfolio

The investment landscape is rapidly changing in 2022. Growth in the economy is slowing due to persistent supply difficulties, rising interest rates, record-high inflation, and geopolitical strife.

Furthermore, as the first-quarter earnings season gets underway, most companies’ management commentaries reflect sustained input cost hikes, with the majority of this attributable to supply chain concerns rather than the Russia-Ukraine conflict.

In such a volatile environment, a look at the TipRanks Smart Portfolio can save investors a lot of time and money by assisting them in picking winners, even during these difficult times. The tool takes into account a variety of factors to assist investors in making the best investment decisions, including age, income level, and risk appetite.

Investors can use the TipRanks Smart Portfolio to compare their portfolios to the best-performing portfolios on TipRanks and obtain important information. The best performing portfolios are the top 10% of TipRanks portfolios that typically outperform the markets.

One of the top sectors in the best-performing portfolios on TipRanks is Consumer Goods, which has an allocation of 24.45%.

So, let’s take a closer look at the top two Consumer Goods stocks that are included in the best-performing portfolios.

Tesla (TSLA)

Tesla, the electric vehicle manufacturer, has the highest allocation of 11.1% in TipRanks’ Best Performing Portfolio among consumer goods companies.

With a market capitalization of $906.9 billion, the company has returned 30% in the last year.

Tesla recently reported strong first-quarter results, with both earnings and revenues up considerably over the year-ago quarter. Revenues increased by 81% year-over-year to $18.8 billion, exceeding Wall Street expectations of $17.8 billion. An increase in deliveries and higher average selling prices fueled the company’s top-line growth.

Furthermore, earnings per share of $3.22 spiked 246% year-over-year and greatly outperformed analysts’ expectations of $2.26 per share.

Following the company’s Q122 financial announcement, JPMorgan analyst Ryan Brinkman was delighted with Tesla’s performance and delivery metrics.

The analyst writes, “Overall, TSLA is leading the industry in profitability at ~30% GMs, AHEAD of EVEN legacy combustion engine OEMs, reflecting: 1) EV pricing tailwind, and 2) manufacturing scale.”

As a result, Brinkman reiterated a Buy rating and a price target of $1,300 on the stock.

However, the rest of the Street is cautiously optimistic, with a Moderate Buy consensus rating based on 14 Buys, eight Holds, and five Sells. The average TSLA stock forecast is $980.41, implying almost 12% upside potential from current levels.

Coca-Cola (KO)

The beverage giant Coca-Cola is included in TipRanks’ Best Performing Portfolio with a 1.59% allocation. Over the past year, the stock has fared well, with a nearly 26% return.

The company’s strong first-quarter results were revealed earlier this week. Revenues increased by 16% year-over-year to $10.5 billion, while earnings increased by 23% to $0.64 a share. In addition, despite a difficult operating environment, the company was able to increase operating margins.

In addition, Coca-Cola CEO James Quincey is optimistic about the company’s top-line growth in 2022. Coca-Cola expects organic sales growth of 7-8% for 2022. The company also forecasts adjusted EPS growth of 5% to 6% and free cash flow of around $10.5 billion.

Following the Q122 earnings results, Morgan Stanley analyst Dara Mohsenian believes that “Coke is well-positioned to beat street topline expectations and also post higher LT (long term) growth than the market perceives and consensus.”

The analyst stated, “We thought Coke’s tone was positive on the call, with a high degree of confidence in its internal execution and positioning, despite external volatility.”

As a result, the four-star analyst maintained a Buy rating and a price target of $76 on the stock.

The rest of the analysts on the Street, however, do not agree with Mohsenian, and are cautiously optimistic, with a Moderate Buy consensus rating based on 13 Buys and five Holds. The average KO stock forecast is $70.00, implying almost 6% upside potential from current levels.

Bottom Line

Despite the macroeconomic challenges, these two consumer goods firms, which are part of TipRanks’ Best Performing Portfolio, might be considered a safe investment.

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