Mentioned: Casino Guichard-Perrachon SA (CO) , Kraft Foods Inc (MDLZ) , Coca-Cola Co (KO) , PepsiCo Inc (PEP) , Walmart Inc (WMT) , Mondelez International Inc (MDLZ) , Procter & Gamble Co (PG)
- The consumer defensive sector trades roughly 1% above our fair value estimate, but we see a handful of undervalued industries and companies.
- We believe the market undervalues Mondelez (MDLZ) and see upside stemming from the wide-moat manufacturer's cost-savings initiatives.
- The market currently offers a discount on global beverage behemoths Coca-Cola (KO) and PepsiCo (PEP), in our opinion. We expect long-run earnings growth to rebound despite near-term challenges.
- Although we see few economic moats in the European defensive retail industry, French retailer Casino Guichard-Perrachon (CO) offers exposure to faster-growing Latin America, and trades a sizable margin of safety, in our opinion.
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R.J. Hottovy does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.