Oppenheimer names new consumer staples Top Picks

Oppenheimer analyst Rupesh Parikh on the firm's coverage of consumer staples: "Year-to-date, the consumer staples group as represented by the XLP ETF is now down 8% vs. a 12% gain in the S&P 500. The average NTM consensus P/E multiple has contracted 16% to 19.5x from a recent April 2023 peak of 23.2x and remains above historical averages of 18.2x. On a relative basis, the group now trades more in line with historical averages. Amid a much higher rate backdrop and our cautious fundamental views toward the group, especially food names, we still see risk of a further re-rating. Our current Outperformrated consumer staples names are CHD, FRPT, and PBH, but these are not immune from a further re-rating in the space. We are updating our top picks to include COST, WMT, CHD, ULTA, and PBH. We are removing FRPT from top picks amid a higher rate backdrop and pet category headwinds that add risks to the nearer-term bull case."

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