Mentioned: Imperial Brands PLC (IMB) , Sainsbury (J) PLC (SBRY) , The Kraft Heinz Co (KHC) , Kellogg Co (K) , Coca-Cola Co (KO) , Snyder's-Lance Inc (LNCE) , PepsiCo Inc (PEP) , Campbell Soup Co (CPB) , Mondelez International Inc (MDLZ) , Procter & Gamble Co (PG)
- 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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Erin Lash does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.