CNBC’s Jim Cramer on Wednesday recommended a list of essential consumer products for 2023.
“I’m not entirely sure we’re in a recession next year, but we’re definitely looking forward to [at] a significant slowdown, and this is amazing for basic consumer products,” he said.
The Fed raised interest rates by 50 basis points on Wednesday, breaking a streak of four consecutive 75 basis point hikes, and is forecasting rate hikes for next year. Chairman Jerome Powell also signaled that the central bank needed to analyze more data to make sure inflation was coming down substantially.
With the central bank unlikely to change its stance anytime soon, fears are growing on Wall Street that a recession could hit next year. Such economic conditions can be good for companies that make basic consumer products, which tend to perform well regardless of economic volatility, as consumers tend to buy essentials such as food and household items no matter what. .
Cramer said companies that make basic consumer products “will be able to continue to post robust earnings growth even as most other industries tumble.”
Here is his choice:
Archer Daniels Midland
- Cramer said the food company, whose shares have performed the best in consumer goods this year, stands to gain as long as the Russian-Ukrainian war continues. Archer-Daniels-Midland shares are up more than 37% year-to-date.
- Cramer said Campbell Soup is the third-largest consumer goods stock this year, and for good reason. He praised the company’s strong brand portfolio, pricing policy, and earnings and revenue that topped the company’s performance in the most recent quarter. Cramer added that he expects the company to see significant earnings growth in 2023 as its initial costs continue to fall. Campbell Soup shares are up more than 31% year-to-date.
- Prestigious cosmetics stocks are likely to rise as China prepares to reopen its economy, Cramer predicts.
Constellation of brands
- The liquor company is poised to thrive in a recession, he said, as alcohol sales tend to remain stable during periods of economic turmoil.
Alliance Walgreens Boots
- Kramer said he believes the company is a “turnaround story” thanks to CEO Rosalind Brewer’s strategy to make the company more care-focused, adding that he is bullish about its plans for Walgreens.
Disclaimer: Cramer’s Charitable Trust holds shares in Estee Lauder and Constellation Brands.