The TipRanks Smart Portfolio tool allows investors to better understand their portfolio as it allows them to benchmark their portfolio against the Top Performing portfolios on TipRanks. In the current volatile environment, this could be an extremely useful feature.
The technology sector is a strong favorite among the top-performing portfolios on TipRanks with a sector allocation of 50.4%. The Consumer Goods sector comes in second with a sector allocation of 27.8%.
Using this tool, we looked at two stocks in the Consumer Goods sector beyond the more popular names like Amazon (AMZN) but are still worth considering. Let us take a look.
Coca-Cola (NYSE: KO)Even amid the overall market volatility, Coca-Cola shares have fared relatively well this year and are up 6.1%. The stock is currently hovering near a 52-week high with a closing price of $62.91 on July 7.
The stock is among the mega-cap stocks among the TipRanks Top Performing Portfolios with a market capitalization of $272.7 billion. KO comprises 2.5% of the Top Performing Portfolios in the Consumer Goods Sector.
The company is expected to announce its fiscal Q2 results on July 26.
The beverage giant’s management remains confident of achieving its financial targets for FY22 and stated in its Q1 results that it was “well-equipped to win in all types of environments as we fuel strong topline momentum and create value for our stakeholders.”
KO reiterated its outlook for FY22 in Q1 and expects its organic revenues to grow in the range of 7% to 8%. However, when it comes to comparable net revenues, the company expects this outlook to be impacted by 2% to 3% due to exchange rate fluctuations.
In an inflationary environment, KO has forecasted commodity price inflation to be in the “mid single-digit percentage” for FY22. Comparable earnings (currency-neutral) are anticipated to grow in the range of 8% to 10%.
It is this optimism in the face of the current uncertainty that makes the stock a hot pick for Morgan Stanley analyst Dara Mohsenian.
The analyst is convinced that KO “will post above-consensus topline growth in both 2022, updating our existing analysis, as well as in 2023, with new detailed line-item analysis.”
Mohsenian is of the view that Coca-Cola’s “pricing power and away from home recovery post-COVID drives much better KO near-term visibility than CPG [consumer packaged goods] peers.”
As a result, the analyst sees “150 bps [basis points] of total organic sales upside for 2023, which is substantial for a large cap Staples name.”
Mohsenian remains bullish about KO with a Buy rating and a price target of $76 on the stock. The analyst’s price target is the highest on the Street and implies an upside potential of 20.8% at current levels.
Overall, Wall Street analysts remain bullish about Coca-Cola with a Strong Buy consensus rating based on thirteen Buys and four Holds. The average KO price target of $70.94 implies an upside potential of 12.8% at current levels.
Ford Motor Co. (NYSE: F)Shares of Ford have been on an upswing in the past five days and are up 6.2% after the automobile major announced impressive sales figures for the month of June. Ford is expected to announce its Q2 earnings on July 27.
Ford made up 2.2% of the Top Performing Portfolios on TipRanks in the Consumer Goods Sector.
Even as the automobile industry is battling supply constraints leading to sales dropping by 11%, Ford’s total sales soared 31.5% year-over-year to 152,262 vehicles in June.
Andrew Frick, the Vice-President of Sales, Distribution & Trucks at Ford Blue commented, “Ford outperformed the industry driven by strong F-Series, Explorer and new Expedition and Navigator SUV sales. Combined, these vehicles represented just over 56% of our sales in June – up about eight percentage points from May.”
Ford’s average transaction price increase outperformed the vehicle industry as it increased around $1,900 per vehicle month-on-month versus an increase for the vehicle industry of about $150.
Last month, even Credit Suisse analyst Dan Levy came away bullish on the stock after a tour of Ford’s F-150 Lightning plant and a meeting with the top management.
The analyst noted that the company’s management had noticed that Ford’s quality issues stemmed from “supplier challenges and lack of design robustness…i.e. the recent Mach-E recall related to lack of design robustness.”
Levy was referring to a string of vehicle recalls by Ford in recent times due to quality issues.
The analyst pointed out that the company’s management was working “to incorporate the supplier quality initiatives” and was in the process of “completely redesigning its end-to-end quality operating system to improve design robustness, which should driver [drive] earlier identification of issues.”
As a result, the analyst reiterated a Buy rating and a price target of $21 implying an upside potential of 80.3% on the stock.
Rest of the analysts on the Street are cautiously optimistic about Ford with a Moderate Buy consensus rating based on six Buys, 10 Holds, and one Sell. The average Ford price target of $17.63 implies an upside potential of 51.3% at current levels.
Concluding ThoughtsIt seems that these two stocks are well poised to ride out the current uncertainty in the market and could be a valuable addition to investors’ portfolios.
The demand for electric vehicles (EVs) continues to be strong amid rising fuel costs and the growing focus of governments across the globe to bring down emissions. Though June sales numbers of some EV makers have been encouraging, supply chain issues, chip shortage, and the impact of a potential recession continue to haunt the broader industry. Using the TipRanks Stock Comparison tool, we will pit Ford, Nio, and General Motors against each other to pick the EV stock with a higher upside potential.
Ford (NYSE: F)Ford’s June sales surged 31.5% to 152,262 vehicles. As per the company, it bucked the downward industry trend, which saw a 11% sales decline on the month.
Ford’s June sales were driven by the demand for the F-Series, Explorer, and Expedition, along with continued strength in battery EVs. June sales of Ford’s EVs came in at 4,353, up 76.6% from the prior-year quarter. Ford’s EV portfolio includes F-150 Lightning, Mustang Mach-E, and E-Transit.
Despite stellar June figures, Ford stock fell 1.06% on July 5, as the company’s Q2 sales missed expectations. Q2 sales increased 1.8% to 483,688 vehicles, falling short of analysts’ growth expectations in the range of 3.3% to 5.1%. Q2 sales were impacted by chip shortage and industry-wide supply constraints.
Looking ahead, Ford is making significant investments to expand its presence in the attractive EV space. The company plans to invest $50 billion on EVs through 2026, with the goal to produce 2 million EVs per year globally by the end of 2026.
Overall, the Street is cautiously optimistic on Ford stock, with a Moderate Buy consensus rating based on seven Buys, nine Holds, and one Sell. At $18.18, the average Ford price target implies 67.95% upside potential from current levels.
Nio (NYSE: NIO)After facing supply chain and production issues due to COVID-19 lockdowns in China, Nio and its EV peers recently reported strong June deliveries fueled by easing restrictions. Nio’s June deliveries surged 60.3% year-over-year to 12,961 vehicles. Overall, Nio delivered 25,059 vehicles in the second quarter, up 14.4% from the prior-year quarter.
Nio continues to launch new models to capture demand in China, the world’s largest EV market. The company is also expanding its presence in Europe, a lucrative EV market.
In June, NIO launched the ES7 five-seater electric SUV, which is the company’s first SUV based on its latest technology platform – NIO Technology 2.0. Additionally, NIO also launched the 2022 ES8, ES6, and EC6 vehicles, equipped with upgraded features, like the digital cockpit domain controller and sensing suite. The deliveries of the ES7 and the new versions of ES8, ES6 and EC6 are expected to commence in August 2022.
Meanwhile, Nomura analyst Martin Heung lowered his price target for Nio stock to $25.80 from $51.50, and maintained a Buy rating. Heung noted that concerns over the company's ES7 SUV model's revenue contribution may persist. The analyst pointed that Nio’s mass-market brand is highly priced, which will limit the size of the client base it can reach.
Nio earns a Strong Buy consensus rating backed by 10 unanimous Buys. The average Nio price target of $33.66 implies 51.76% upside potential from current levels.
General Motors (NYSE: GM)General Motors’ Q2 sales fell 15% to 582,401 vehicles in the U.S. due to weak wholesale volumes. That said, the company’s sales came slightly ahead of analysts’ expectations of 16% to 17% decline. Also, GM maintained its full-year guidance even though the company held about 95,000 vehicles in its inventory as they were manufactured without some components due to supply constraints.
GM’s Q2 EV sales were over 7,300 units, including the first deliveries of the BrightDrop Zevo 600 and GMC Hummer EV Pickup, and the resumption of Chevrolet Bolt EV and Bolt EUV (electric utility vehicle) production.
Earlier this year, GM announced that it would be investing over $7 billion in its home state Michigan through 2024, to boost its electric truck production and build a new EV battery cell plant. It aims to increase its EV production capacity in North America to over 1 million vehicles by 2025.
Following the Q2 sales update, Barclays analyst Brian Johnson lowered his Q2 EPS estimate for General Motors to $1.25 from $1.60. The estimate revision was triggered by the company’s plans to hold 95,000 units in inventory until they are completed, and to recognize revenue when these vehicles are sold to dealers as the year progresses.
However, Johnson maintained his full-year estimates and sees the supply constraints as transitory. He reiterated a Buy rating on GM stock with a price target of $52.
Overall, General Motors earns the Street’s Strong Buy consensus rating based on 13 Buys, two Holds, and one Sell. The average General Motors price target of $57.07 implies 76.31% of upside potential from current levels.
ConclusionShares of Ford, Nio, and General Motors have plunged nearly 46%, 30%, and 45%, respectively, year-to-date. While supply chain pressures and higher input costs might continue to impact near-term growth, these companies are well-positioned to capture the increasing global demand for EVs.
Currently, Wall Street analysts seem to be more optimistic about Nio and General Motors, while they are treading cautiously with regard to Ford. If we consider the upside potential from current levels, then General Motors stock seems to be a better pick.
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