The TipRanks Smart Portfolio tool allows investors to better understand their portfolio as it allows them to benchmark their portfolio against the Top Performing portfolios on TipRanks. In the current volatile environment, this could be an extremely useful feature.
The technology sector is a strong favorite among the top-performing portfolios on TipRanks with a sector allocation of 50.4%. The Consumer Goods sector comes in second with a sector allocation of 27.8%.
Using this tool, we looked at two stocks in the Consumer Goods sector beyond the more popular names like Amazon (AMZN) but are still worth considering. Let us take a look.
Coca-Cola (NYSE: KO)
Even amid the overall market volatility, Coca-Cola shares have fared relatively well this year and are up 6.1%. The stock is currently hovering near a 52-week high with a closing price of $62.91 on July 7.
The stock is among the mega-cap stocks among the TipRanks Top Performing Portfolios with a market capitalization of $272.7 billion. KO comprises 2.5% of the Top Performing Portfolios in the Consumer Goods Sector.
The company is expected to announce its fiscal Q2 results on July 26.
The beverage giant’s management remains confident of achieving its financial targets for FY22 and stated in its Q1 results that it was “well-equipped to win in all types of environments as we fuel strong topline momentum and create value for our stakeholders.”
KO reiterated its outlook for FY22 in Q1 and expects its organic revenues to grow in the range of 7% to 8%. However, when it comes to comparable net revenues, the company expects this outlook to be impacted by 2% to 3% due to exchange rate fluctuations.
In an inflationary environment, KO has forecasted commodity price inflation to be in the “mid single-digit percentage” for FY22. Comparable earnings (currency-neutral) are anticipated to grow in the range of 8% to 10%.
It is this optimism in the face of the current uncertainty that makes the stock a hot pick for Morgan Stanley analyst Dara Mohsenian.
The analyst is convinced that KO “will post above-consensus topline growth in both 2022, updating our existing analysis, as well as in 2023, with new detailed line-item analysis.”
Mohsenian is of the view that Coca-Cola’s “pricing power and away from home recovery post-COVID drives much better KO near-term visibility than CPG [consumer packaged goods] peers.”
As a result, the analyst sees “150 bps [basis points] of total organic sales upside for 2023, which is substantial for a large cap Staples name.”
Mohsenian remains bullish about KO with a Buy rating and a price target of $76 on the stock. The analyst’s price target is the highest on the Street and implies an upside potential of 20.8% at current levels.
Overall, Wall Street analysts remain bullish about Coca-Cola with a Strong Buy consensus rating based on thirteen Buys and four Holds. The average KO price target of $70.94 implies an upside potential of 12.8% at current levels.
Ford Motor Co. (NYSE: F)
Shares of Ford have been on an upswing in the past five days and are up 6.2% after the automobile major announced impressive sales figures for the month of June. Ford is expected to announce its Q2 earnings on July 27.
Ford made up 2.2% of the Top Performing Portfolios on TipRanks in the Consumer Goods Sector.
Even as the automobile industry is battling supply constraints leading to sales dropping by 11%, Ford’s total sales soared 31.5% year-over-year to 152,262 vehicles in June.
Andrew Frick, the Vice-President of Sales, Distribution & Trucks at Ford Blue commented, “Ford outperformed the industry driven by strong F-Series, Explorer and new Expedition and Navigator SUV sales. Combined, these vehicles represented just over 56% of our sales in June – up about eight percentage points from May.”
Ford’s average transaction price increase outperformed the vehicle industry as it increased around $1,900 per vehicle month-on-month versus an increase for the vehicle industry of about $150.
Last month, even Credit Suisse analyst Dan Levy came away bullish on the stock after a tour of Ford’s F-150 Lightning plant and a meeting with the top management.
The analyst noted that the company’s management had noticed that Ford’s quality issues stemmed from “supplier challenges and lack of design robustness…i.e. the recent Mach-E recall related to lack of design robustness.”
Levy was referring to a string of vehicle recalls by Ford in recent times due to quality issues.
The analyst pointed out that the company’s management was working “to incorporate the supplier quality initiatives” and was in the process of “completely redesigning its end-to-end quality operating system to improve design robustness, which should driver [drive] earlier identification of issues.”
As a result, the analyst reiterated a Buy rating and a price target of $21 implying an upside potential of 80.3% on the stock.
Rest of the analysts on the Street are cautiously optimistic about Ford with a Moderate Buy consensus rating based on six Buys, 10 Holds, and one Sell. The average Ford price target of $17.63 implies an upside potential of 51.3% at current levels.
It seems that these two stocks are well poised to ride out the current uncertainty in the market and could be a valuable addition to investors’ portfolios.