The stock market remains under pressure amid worries about high inflation.
Consumer staples stocks may serve as safe-haven assets in the current market environment.
Procter & Gamble and Walmart look attractive at current levels.
Investors will continue to search for stocks that could help them protect their funds in an inflationary environment after the recent U.S. Inflation Rate report indicated that Inflation Rate increased by 8.6% year-over-year in May. Consumer staples companies, which make products that are used every day, are one of the segments that could attract investor interest.
Procter & Gamble
Analyst estimates for Procter & Gamble have moved a bit lower in recent months. Currently, the company is expected to report earnings of $5.84 per share in 2022 and $6.23 per share in 2023, so the stock is trading at 23 forward P/E.
This is not cheap for a consumer staples stock, but traders are willing to pay a premium for a company that can raise prices in an inflationary environment.
Earnings estimates are moving lower as the company’s costs are also increasing due to inflation, but the stock will likely outperform the broader market in case the broad sell-off continues.
Not surprisingly, analyst estimates have moved lower in recent weeks. The company is expected to report earnings of $6.41 per share in the current fiscal year and earnings of $6.96 per share in the next fiscal year, so the stock is trading at 17 forward P/E.
The key question for investors is whether risks have been already priced in by the market. Walmart declined from the $160 level to the $120 level in less than two months, so the stock may attract speculative traders and investors who are willing to bet that the strong sell-off was not justified.
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This article was originally posted on FX Empire