Edison Themes: ConsumerWatch: Give me a reason to love you

The consumer sectors entered the year with almost universal optimism about the outlook for profits for the individual companies, albeit there was a general feeling that the recovery would be gradual and weighted to the second half of the year.

There are signs of life in some of the macroeconomic indicators and a number of sectors have enjoyed good upgrades in Q124. However, the ongoing overall negative trends in consensus profit estimates, with more companies and sectors seeing further downgrades to forecasts than upgrades in the period, due to a combination of lower revenue growth and profitability in the main, have given investors few reasons to get behind the predicted recovery for the consumer companies. A change in momentum would be extremely welcome for the many companies that continue to look very attractively valued.