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Monday, October 18, 2021
Pricing Power: The Inflation Combat
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Stocks with strong pricing power have recently lagged but appear attractive if stagflationary concerns continue to build. The strongest pricing power may be able to maintain profits despite slowing revenue growth and rising input costs if inflation remains high and economic growth weakens.
While economic uncertainty still dawns Wall Street with contradictory CPI and NFP data numbers, it is possible that if US Fed Chairman Powell sticks to hymn the chant of inflation being transitory, the equity markets may continue to climb higher. The upcoming Q3 earnings are anticipated to be dynamic and may be the driving force to dictate the direction of markets.
The supply chain crunch along with the global energy crises, and investors watching treasury yield movements like hawks, the companies that hold a better chance of price appreciation than others are the price makers.
|Name||CMP||Dividend Yield||52 Week High||52 Week Low||Analyst Target Price||Estimated Return||Buy||Sell||Hold||Market Cap ($ Billion)||Est Rev Growth||GICS Industry Name|
|NIKE Inc||158||0.70||174.38||118.8||177.80||12.52%||26||2||4||250.10||6.28%||Textiles, Apparel & Luxury Goods|
|Apple Inc||145||0.61||157.26||107.32||166.75||15.13%||36||2||9||2394.23||33.50%||Technology Hardware & Storage|
|Philip Morris International||98.4||5.08||106.51||68.93||111.63||13.47%||13||0||6||153.31||8.71%||Tobacco|
|Costco||452||0.70||470.49||307||484.06||7.00%||24||2||10||199.88||7.97%||Food & Staples Retailing|
Date: 18th Oct 2021
Note: The above recommendations and forecasts are as per Bloomberg
Risks and Assumptions for Back-tested trading strategies
Data Source: Bloomberg
Data as of: 18/10/2021
Arun Leslie John
Chief Market Analyst
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