Recession-resistant stocks belong to companies whose demand is not affected by the business cycle in the economy. A few of those sectors are FMCG, energy, utilities, pharma, etc. With so many countries experiencing high inflation, investors can find solace within these companies for their investment needs.
Here are two such stocks from the UK market that have generated good returns for their shareholders in the last year. Analysts are still optimistic about a further rise in share prices and have assigned them Buy ratings.
Tobacco manufacturer British American Tobacco (GB:BATS) and mining company Glencore (GB:GLEN) also tick the box for income investors with their high dividend yields.
We have picked these stocks from the TipRanks Trending Shares tool for the UK market. This tool suggests stocks that were rated by analysts in the last few days.
British American Tobacco (BAT)
BAT is a famous British tobacco manufacturing company with some leading products on the market, such as Camel, Newport, Dunhill, Vuse, Velo, and more.
BAT, as a tobacco company, benefits from high margins and stable demand for its product. With the rising cost of raw materials and falling volumes due to health concerns, BAT was able to increase prices to maintain profit levels.
Another bullish aspect of the company is the growth of its non-combustible product line. The company is on a path to transform its business into less risky products, which include vapor, tobacco heating products, oral tobacco, and nicotine. The heavy investment by the company in this category is showing favorable results with improved market share.
In the first nine months of 2022, the company added 3.2 million customers in this category, bringing the total to 21.5 million. The company targets making this segment profitable by 2025.
The company’s stock has been trading up by almost 30% in the last year.
British American Tobacco Stock Forecast
According to TipRanks’ analyst consensus, BATS’ stock has a Strong Buy rating with seven Buys out of a total of eight recommendations.
The BATS target price is 4,157.1p, which is 24.2% higher than the current price level. The price has a high forecast of 4,800p and a low forecast of 3,800p.
The stock enjoys a Buy rating from major investment banks such as Credit Suisse, Citigroup, UBS, Deutsche Bank, J.P. Morgan, and more.
Glencore
Glencore is among the leading natural resources companies, engaged in the mining and trading of commodities such as copper, cobalt, nickel, zinc, lead, etc.
In 2022, the company has been riding high on the soaring commodity prices of oil, gas, and coal after the Russia-Ukraine war. In its first-half results, the profits increased by nine times.
However, the third-quarter production numbers depicted a slightly different picture. The extreme weather conditions in Australia have affected the company’s production numbers, leading to reduced guidance for the full year. The production guidance for coal was decreased by 9% to 11 million tonnes, and nickel and zinc were down by 7% and 6%, respectively.
The reduced production number will also push the earnings of the second half down to $1.6 billion, as compared to $3.7 billion in the first half of 2022.
Analysts, however, remain optimistic about the stock and believe this is only a short-term hit to revenue. Meanwhile, rising crude oil prices may help to support margins.
Is Glencore a Good Stock to Buy?
According to TipRanks’ rating consensus, Glencore stock has a Strong Buy rating.
The average target price is 644.58p, which represents a growth of 13.5% on the current price level.
Conclusion
Time and again, Glencore and British American Tobacco have proven their stronghold on their businesses and their commitment to rewarding shareholders.
The analysts’ Strong Buy ratings just say that there is more left to enjoy for the shareholders.
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