2 consumer goods stocks to consider for your smart portfolio

The S&P 500 (SPX) and the technology-heavy NASDAQ 100 (NDX) have plunged into bearish territory, down nearly 23% and 32%, respectively, year-to-date, as of Thursday, June 16. Additionally, the Dow Jones Industrial Average fell 741.46 points on Thursday, dropping below the key 30,000 level for the first time since January 2021. Investors fear the Federal Reserve’s aggressive approach to tackling inflation does not push the economy into recession.

In such a challenging market environment, TipRanks’ Smart Portfolio tool helps investors make prudent investment decisions. This tool allows investors to compare their portfolios to the best performing TipRanks portfolios. It helps to compare the asset and sector allocation, dividend yield and some other parameters of the investor’s portfolio with the best performing TipRanks portfolios.

Let’s take a look at two consumer goods stocks that are among the best performing TipRanks portfolios. Interestingly, the consumer goods sector accounts for 27.57% of the top performing TipRanks portfolios.

Shares of Nio are down nearly 40% year-to-date due to supply chain pressures and the impact of COVID-related lockdowns on production. Investors were also concerned about the potential delisting of several Chinese stocks from the US stock exchange, but Nio has now listed its shares on the Singapore and Hong Kong stock exchanges to alleviate those concerns.

This week, Nio launched its ES7 sport utility vehicle, with deliveries scheduled to begin on August 28. While Nio may continue to be under pressure in the near term due to supply chain bottlenecks, Wall Street analysts remain bullish on the electric vehicle. (EV) manufacturer’s long-term outlook.

Mizuho analyst Vijay Rakesh believes battery electric vehicles continue to be a “bright spot” amid macroeconomic challenges. Rakesh believes that May battery EV sales in major EV markets could recover well from the impact of shutdowns in March and April. May sales were up 19% month-on-month, driven by China’s 80% rebound.

Rakesh pointed out that global battery EV penetration in May had risen to around 11.4%, from 8% in 2021. The analyst believes that while lockdowns in key China market remain mixed, the reopening of Shanghai and government stimulus measures bode well for a strong second half. and could benefit Nio and Tesla (TSLA).

Despite short-term headwinds related to logistics and chip shortages, Rakesh believes secular trends in electric vehicles remain strong, and Nio, Tesla and Rivian (SHORE) are all “well positioned”.

Rakesh reiterated a buy rating on Nio stock with a price target of $55.

Overall, Nio gets a strong buy consensus rating based on 14 unanimous buys. The average Nio price target of $39.26 implies a potential upside of 104.80% from current levels.

Coca-Cola, one of the world’s leading soft drink companies, impressed investors with its stellar first quarter results. The company’s first-quarter revenue grew 16% to $10.5 billion, fueled by a robust recovery in out-of-home channels (like restaurants and movie theaters) following the reopening of the economy , and continued growth in home consumption channels. .

Strong revenue growth and the company’s pricing power contributed to a 16% increase in Adjusted EPS to $0.64, which more than offset the impact of inflationary pressures and higher marketing investments.

Morgan Stanley analyst Dara Mohsenian believes analysts’ consensus estimate for Coca-Cola’s revenue in 2022 and 2023 is too low, as he continues to have a “high degree of belief” that the The company will deliver above-consensus revenue growth in both years based on its analysis.

Mohsenian believes that Coca-Cola’s pricing power and recovery in the out-of-home channel post-COVID provides much better near-term visibility for the company than its consumer packaged goods peers.

Mohsenian also sees better EPS visibility for Coca-Cola than its peers given “2022 revenue upside, stronger pricing power with limited demand elasticity, and more manageable cost/demand elasticity relative to the industry.” ‘price gap”.

Mohsenian reiterated a buy rating for Coca-Cola stock with a price target of $76.

Overall, the street has a strong buy consensus rating on Coca-Cola stock based on 12 buys and four holds. At $71, Coca-Cola’s average price target suggests upside potential of 20.20% from current levels.

Conclusion

Despite the macro challenges, Wall Street analysts continue to be bullish on Nio and Coca-Cola, which are among TipRanks’ best performing portfolios. While Nio should benefit from the growing demand for electric vehicles, Coca-Cola should continue to dominate the soft drinks space thanks to its expanded global presence, continued innovation and brand power.

Additionally, Nio and Coca-Cola score nine out of 10 on TipRanks’ Smart Score rating system, indicating that these stocks are likely to outperform the market as a whole.

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