We continue to recommend a BUY for our three top picks in the consumer segment,
which are Puregold Price Club, Inc. (PGOLD, Target Price: P49.51), Jollibee Foods Corp. (JFC, Target Price: P335.28), and Monde Nissin Corp. (MONDE, Target Price: P11.97) as they stand to benefit from the pick-up in consumer spending, particularly staples and F&B, on the back of moderating inflation coupled with further macroeconomic improvements. <\/p>\n\n\n\n
Our optimistic outlook for these companies is further underpinned by our expectations of lower input costs, positive forex factors, and judicious expansion plans which should improve margins in the coming quarters.<\/p>\n\n\n\n
Consumer sentiment slowly turning positive<\/strong><\/p>\n\n\n\n The BSP\u2019s recently released Consumer Expectations Survey showed substantial improvement vs last quarter, with consumer sentiment for the current quarter improving to -15.6 from the last reading of -20.5. Several drivers that led to this slight bump were expectations of higher income from salaries, remittances, and other sources, additional sources of income, permanent employment, and additional working family members. <\/p>\n\n\n\n Sentiment for the next quarter turned positive with a +0.7 print vs -0.4 in 2Q 2024. However, albeit sentiment for the next 12 months remain positive, it continued its Spending outlook points at the same direction<\/strong> <\/p>\n\n\n\n We note that the consumer spending outlook for goods and services for the 4th quarter (Q4) posted better numbers, led primarily by NCR\u2019s jump from 36.1 to 44.4. Given this, we expect companies, specifically those in the consumer sector to post notable improvement for Q4 on the back of higher consumer spending.<\/p>\n\n\n\n
slow decline, indicating that consumers are slightly more pessimistic in the long run. Despite this, we believe that sentiment should improve moving forward due to easing inflation and the daily wage increases of P21-75 for CALABARZON and P33-43 for Central Visayas which took effect recently and expected to improve the spending ability of around 1.2-Mn Filipinos.<\/p>\n\n\n\n