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Quarter-End Insights

Our Outlook for Consumer Cyclical Stocks

Amid signs of economic stabilization, several yellow caution flags still wave for the consumer cyclical sector.

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  • Signs of economic stabilization are encouraging, but there are still several reasons for caution.
  • SG&A leverage will be additive, but we anticipate reduced margin expansion from consumer cyclical firms this year due to price competition, infrastructure and supply chain investments, and persistent raw material inflation.
  • Large cash stockpiles and subsequent share repurchase programs still set the stage for earnings outperformance.


R.J. Hottovy does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.