US Consumer Staples: The Weekly Tab: No Ticker-Tape Parade For Staples

Research evidence excerpt

US Consumer Staples: The Weekly Tab: No Ticker-Tape Parade For Staples

sentiment continues to lean bearish, we have fielded more questions on the

catalyst path from here with planned deal close on the horizon.

The Week Ahead:

Besides our bi-weekly Nielsen report, we have one company (MKC) reporting earnings

next week on Thursday before the open (see details below).

McCormick & Co (Neutral): MKC is scheduled to report 2Q26 results next

Thursday (6/25) before the open (link). Heading into the print, we do not expect

any major surprises and believe quarter will be roughly in-line with expectations

along with guidance reiterated for the year. In an environment where Packaged

Food remains challenged, we are not surprised that investors believe this would be

enough for the quarter, however the catalyst path from here remains cloudy given

the overhang from the pending ULVR transaction and slowing demand trends

further muddy the path forward. While valuation screens as attractive, we think

greater visibility on the fundamental trajectory from here, both as it relates to the

NT and deal, is needed before stepping in.

Chart of the Week: Cheap for a Reason?

As we approach 2Q earnings season, valuation multiples across Beverages, HPC, and

Packaged Food remain at or near decade lows. While valuation support has historically

helped in creating downside protection, the past year has demonstrated that low

multiples alone have not been enough of a catalyst to drive sustained outperformance.

Instead, investors conversations/concerns have shifted to understanding the future

earnings power that these companies can generate, particularly as category growth

continues to slow and volume recovery remains elusive. In some ways our discussions