Erste Group Bank AG has singled out two European consumer staples stocks with strong setups for 2023.
L'Oreal S.A. ( OTCPK:LRLCF ) is noted by analyst Stephan Lingnau to be characterized by a high operating margin. The margin is seen increasing slightly in the coming years. Looking ahead, the firm expects L'Oreal share to outperform the sector and also the overall market due to the good growth prospect .
Nestle ( OTCPK:NSRGY ) also makes the consumer staples buy list. "The estimates for sales development in 2022 and 2023 have improved significantly in recent months. Adjusted net income should increase slightly this year (+4.9%) and more strongly in 2023 (+7.0%)," wrote Lingnau. While the valuation on Nestle by the price-to-earnings ratio is higher than the sector average, profitability as viewed by return on equity and operating margin is also noted to be significantly better
Compare growth, profitability, and valuation metrics on L'Oreal and Nestle.
Sector watch: The rally with many consumer staples stocks may not be over yet.
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L'Oreal and Nestle are called consumer staples standouts