Bernstein sees brighter outlook for consumer stocks with global exposure

Investing.com - Bernstein has issued a new outlook for consumer sector stocks, highlighting potential investment opportunities despite what it calls "another dismal year" for the sector in 2025.

According to Bernstein analyst Alexia Howard, both Consumer Discretionary and Consumer Staples names have underperformed the broader market by low double-digit percentages year-to-date, though price-to-forward earnings valuation multiples now look attractive, particularly for Consumer Staples. InvestingPro subscribers can access detailed valuation metrics for consumer stocks, including Fair Value estimates that help identify which companies are truly undervalued versus those facing fundamental challenges.

The firm recommends focusing on consumer stocks that are more international, more exposed to higher-income consumers, more defensive, and avoid idiosyncratic fundamental pressures that may not be fully priced in yet.

Bernstein suggests that if either the tech sector experiences further volatility or pressure on low-income consumers precipitates an economic slowdown, the Consumer Staples sector would likely benefit from a flight to safety, with globally-focused companies performing better than domestic ones. Investors looking to identify resilient consumer staples companies can use InvestingPro’s advanced stock screener to filter for companies with strong international exposure, solid dividend histories, and favorable financial health scores.

Key themes to watch include tariff volatility affecting apparel and household products, GLP-1 drug uptake, and consumer bifurcation as SNAP and healthcare benefit cutbacks pressure lower-income households while middle and higher-income households benefit from upcoming tax breaks. For comprehensive analysis of how these themes impact specific consumer companies, InvestingPro offers Pro Research Reports on 1,400+ US equities, transforming complex Wall Street data into clear, actionable intelligence for smarter investing decisions.

In other recent news, Chipotle Mexican Grill has appointed Josh Weinstein, the CEO of Carnival Corporation, to its board of directors. This move adds Weinstein’s extensive experience to Chipotle’s Nominating and Corporate Governance committee. Meanwhile, Bernstein SocGen Group has reiterated its Outperform rating on Chipotle stock, maintaining a $40.00 price target amid concerns about the company’s growth potential. UBS has adjusted its outlook, lowering Chipotle’s price target to $45.00 from $56.00 but maintaining a Buy rating, citing challenges in same-store sales and margins. Similarly, Truist Securities reduced its price target to $45.00 from $53.00 while also keeping a Buy rating, pointing to ongoing macroeconomic pressures affecting Chipotle’s traffic. These developments come as Chipotle navigates a complex economic landscape, with analysts offering varied perspectives on the company’s future prospects.

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