Consumer Goods Could Lead Markets in 2025

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The stock market continues to shift away from big gains in tech and towards other sectors. That’s a healthy sign that stocks can trend higher into next year. One underperforming sector has been consumer goods companies, thanks to the combination of surging inflation and consumer fears.

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  • But consumer confidence is soaring higher, and inflation has moderated over the past year. That’s allowing consumer goods companies to start moving towards a catch-up rally.

    One consumer goods player that looks attractive now is J.M. Smucker (SJM). The producer of peanut butter, jams, packaged snacks, and pet foods is seeing better-than-expected quarterly results.

    Revenues are now up nearly 18% over the past year, and profit margins are on the rise. Those are healthy signs, and if they can continue, shares can also trend higher. Smucker shares still trade at 12 times forward earnings, a low valuation for the company’s basket of brands.

    Action to take: Investors may like shares here. The stock has underperformed over the past 12 months but now looks ready to trend higher. And at current prices, Smucker pays a solid 3.8% dividend that has a history of being increased over time.

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  • For traders, the April 2025 $125 calls, last trading for about $5.50, could see mid-double-digit returns on a further uptrend in the months ahead.

     

    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.