CNBC’s Jim Cramer on Wednesday recommended a slate of consumer staple stocks for 2023.
“I’m not entirely convinced that we’re headed for a recession next year, but we’re definitely looking [at] a meaningful slowdown, and that’s terrific for the consumer staples,” he said.
The Fed raised interest rates by 50 basis points Wednesday, breaking its streak of four consecutive 75-basis-point increases, and forecast hiking rates through next year. Chair Jerome Powell also signaled that the central bank needs to parse through more data to be convinced that inflation is lowering substantially.
With the central bank looking unlikely to pivot anytime soon, fears are mounting on Wall Street that a recession could be in the cards for next year. Such economic conditions could fare well for consumer staples companies, which tend to perform well regardless of economic turbulence since consumers tend to buy necessities such as food and household products no matter what.
Consumer staple companies will “be able to keep putting up solid earnings growth even as most other industries will experience down numbers,” Cramer said.
Here are his picks:
Archer-Daniels-Midland
- Cramer said that the food processing company, whose stock is the best performer in consumer staples so far this year, is a winner as long as the Russia-Ukraine war continues. Shares of Archer-Daniels-Midland are up over 37% year to date.
Campbell Soup
- Campbell Soup is the third-best-performing consumer goods stock this year, and with good reason, according to Cramer. He praised the company’s strong set of brands, pricing power and earnings and revenue beat in the company’s most recent quarter. Cramer added that he expects the company to see sizable earnings growth in 2023 as its raw costs continue to fall. Shares of Campbell Soup are up over 31% year to date.
Estee Lauder
- The prestige beauty company stock will likely roar higher with China poised to reopen its economy, Cramer predicted.
Constellation Brands
- The alcoholic beverages firm is poised to do well in a recession since alcohol sales tend to remain steady during periods of economic turbulence, he said.
Walgreens Boots Alliance
- Cramer said he believes the company is a “turnaround story” thanks to CEO Rosalind Brewer’s strategy to make the company more care-focused, adding that he’s optimistic about her plans for Walgreens.
Disclaimer: Cramer’s Charitable Trust owns shares of Estee Lauder and Constellation Brands.
