Key insights
- The author questions the high valuations of consumer staples stocks like Walmart, Costco, P&G, and Coca-Cola, arguing they are more expensive than tech stocks like Nvidia and Meta. The post suggests a potential correction in staples valuations and raises concerns about the impact of persistent high inflation and oil prices on the sector.
Most staples grew over 2% today. But they are already very expensive. Walmart has P/E of 48, and forward p/e of 40, Costoco has a P/E of 53 and forward p/e of 45, P&G has a p/e of 21 and forward p/e of 20, and Coca Cola a p/e of 25 and forward p/e of 23.
These stocks are much expensive at this moment than Nvidia, Meta or Micron.
At what valuation will the market understand that staples are very expensive?
Also, what will hapen to staples if inflation and price of oil will continue to stay high?