Consumer defensive valuations strike us as a touch inflated, with the sector trading at about a 2% premium to our fair value estimates on a market-cap-weighted basis.
Although firms throughout the space remain laser-focused on driving further efficiencies, these efforts to extract costs have failed to offset languishing top-line trends.
As such, we aren't surprised that mergers and acquisitions were once again at the top of the agenda this quarter, with Campbell Soup(CPB) poaching Snyder's-Lance(LNCE) and Hershey(HSY) scooping up Amplify Snack Brands.
This tepid growth has also whetted the appetite of activist investors looking to cook up change.
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