5 Defensive Stocks To Watch In the Stock Market This Week
As we enter a new trading week, investors could be on the lookout for defensive stocks in the stock market. For one, this would be due to the Consumer Price Index (CPI), which rose 8.6% year-over-year in May. This came as a surprise as it exceeded the 8.3% Wall Street was estimating. In addition to that, consumer sentiment slumped to a record low between May and June amid concerns about inflation. As such, investors could be turning to defensive stocks. These are companies from sectors such as healthcare and consumer staples, which tend to see more stable demand in any economic condition.
An example of a defensive stock that investors could be watching this week is Kroger (NYSE: KR). The consumer staple company is set to report its financials from the most recent quarter before the market opens on Thursday. As it stands, Wall Street is expecting the company to report earnings of $1.27 per share on revenues of $44 billion for the quarter, representing year-over-year increases of 6.7% and 6.5% respectively. With that in mind, check out these defensive stocks in the stock market today.
Defensive Stocks To Watch Right Now
- The Procter & Gamble Company (NYSE: PG)
- Ollie’s Bargain Outlet Holdings Inc. (NASDAQ: OLLI)
- Campbell Soup Company (NYSE: CPB)
- Target Corporation (NYSE: TGT)
- Eli Lilly and Company (NYSE: LLY)
Procter & Gamble
Starting us off today is Procter & Gamble (PG). Put simply, the company focuses on providing branded consumer packaged goods to consumers across the world. PG operates through five segments: Beauty, Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care. Under these segments are brands such as Head & Shoulders, Herbal Essences, SK-II, Oral-B, Downy, and many more. Last Wednesday, the company and Microsoft (NASDAQ: MSFT) announced a new multi-year collaboration.
Namely, the consumer staple company is looking to leverage the Microsoft Cloud to help create the future of digital manufacturing at PG. “Together with Microsoft, P&G intends to make manufacturing smarter by enabling scalable predictive quality, predictive maintenance, controlled release, touchless operations and manufacturing sustainability optimization — which has not been done at this scale in the manufacturing space to date,” said PG’s CIO Vittorio Cretella. With Microsoft Azure as the foundation, the new collaboration marks the first time PG will digitize and integrate its data from more than 100 manufacturing sites around the world. Thus, will you be buying PG stock?
Ollie’s Bargain Outlet
Following that, we have Ollie’s Bargain Outlet. As the name suggests, the company operates a chain of discount retail stores. Ollie’s offers a wide array of brand-name products ranging from housewares, daily essentials, and even toys. Notably, the company operates over 400 locations across 28 states, catering to discount shoppers. Last week, the company posted results for the first quarter of the year, with net sales tumbling 10% to $406.7 million.
The company said this was due to last year’s inflated results from the third round of stimulus checks consumers received. However, thanks to the company’s bullish outlook, OLLI stock rose by over 10% last week. According to the earnings report, the company is forecasting sales to be in the range of $450 million to $460 million for the second quarter. Along with that, it expects adjusted earnings for the same period to be between $0.32 and $0.35 per share. Given this positive outlook, will you be keeping tabs on OLLI stock?
Campbell Soup Company
Next, we have Campbell Soup, a company that has been around for generations. Although most would know it for its canned soup products, Campbell has actually grown to become one of the world’s largest processed food companies in the U.S. The company products can be split into two distinct divisions, Meals & Beverages and Snacks, with 13 core categories. Its brands include the likes of Prego, Campbell’s, and Pepperidge Farm to name a few.
Last Wednesday, the company reported its third-quarter financials for fiscal 2022. Diving in, net sales for the quarter increased 7% year-over-year to $2.1 billion. This comes as demand for Campbell’s products remains strong, with consumption also increasing by 4% year-over-year. Along with that, it reported net earnings per share of $0.62, jumping by 15% compared to a year earlier. In the same earnings report, Campbell also said that it is raising its full-year fiscal 2022 sales outlook and reaffirming its prior adjusted EBIT and adjusted EPS guidance. All things considered, is CPB stock worth investing in right now?
General merchandise retailer Target sells products through its retail stores and digital channels. Its product category includes apparel and accessories, beauty and household essentials, food and beverage, hardlines, and home furnishing and decor. Last Thursday, the board of directors declared a quarterly dividend of $1.08 per common share, a 20% increase from $0.90 in the quarter prior. This also marks its 220th consecutive dividend paid since October 1967.
Besides that, Target also announced its updated plan for the year. The company is planning several actions to right-size its inventory for the remainder of the year. Target says this is to create “flexibility in serving guests in a rapidly changing environment.” As part of its strategy, Target will be adding incremental holding capacity close to U.S. ports, taking pricing actions, and removing excess inventory. Moreover, it also aims to work with suppliers to improve lead times in the supply chain. Seeing that TGT stock has been down more than 30% in the past month, should you consider buying the dip?
Eli Lilly and Company
Last but not least, we have Eli Lilly and Company (LLY). It is a health care company that primarily engages in the discovery, development, manufacturing, marketing, and sales of pharmaceutical products across the world. In brief, the company’s portfolio includes treatments for various diseases including diabetes, cancer, endocrine-related illnesses, and Covid-19, to name a few.
Earlier this month, LLY and Boehringer Ingelheim announced that their Jardiance (empagliflozin) drug was associated with a reduction in risk of hospitalization for heart failure in adults with Type 2 diabetes. According to Mohamed Eid, Boehringer Ingelheim’s head of clinical development and medical affairs, the findings suggest that empagliflozin has a well-understood safety and tolerability profile as well. As it stands, LLY and Boehringer Ingelheim have been working hard to establish their competitive footprint in the diabetes and cardiovascular treatment landscapes. Given this, should you add LLY stock to your watchlist?