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Investing.com -- J.P. Morgan took several rating actions in its Consumer Staples 2026 Outlook, shifting positions across beverages, household products and ingredients.
The analysts upgraded Carlsberg, downgraded Henkel, and placed Pernod Ricard and Givaudan on Negative Catalyst Watch, citing challenges in demand, pricing and earnings expectations.
The brokerage raised Carlsberg to “overweight” from “neutral,” saying the brewer’s expanded soft drinks portfolio and technical advantages should support what it describes as the most resilient volume performance among beer companies.
J.P. Morgan said expected synergies from Britvic and “a faster than expected deleveraging path” could enable a return to share buybacks.
The analysts forecast 9% EPS growth for fiscal 2026, calling current valuation levels “an attractive entry point,” with shares trading at 11.5 times 2027 estimated earnings.
In household and personal care, the brokerage cut Henkel to “underweight” from “overweight,” citing “continued softness” in its consumer brands.
The brokerage said promotional pressures in developed markets and vulnerability in adhesives tied to industrial production may limit margin opportunities and create limited room for recovery without meaningful volume leverage or pricing support.
In spirits, J.P. Morgan placed Pernod Ricard on Negative Catalyst Watch, highlighting concerns about further earnings downgrades.
The brokerage pointed to a weak first quarter, ongoing pressure in the United States, Europe and China, and said fiscal 2026 guidance for improved organic sales and defended margins carries downside risk.
Analysts are currently 8% below consensus and expect continued downgrades to weigh on the rating.
Within ingredients, the brokerage placed Givaudan on Negative Catalyst Watch, noting exposure to a slowdown in fine fragrance and pressure at the start of 2026.
The analysts said that attention is likely to turn to a softer opening quarter and that the company may face early-year challenges despite strong execution and share gains.
J.P. Morgan maintains a cautious stance on the sector heading into 2026, citing fragile consumer demand, ongoing pricing pressure, and limited visibility on volume improvement.