Global 2023 Outlook for Consumer Staples Companies: Steady Sailing Through Strong Headwinds

DBRS Morningstar released a commentary titled “Global 2023 Outlook for Consumer Staples Companies: Steady Sailing Through Strong Headwinds.” Our neutral outlook for this sector reflects our view that the credit risk profiles of consumer staples companies are generally well positioned to navigate near-term economic turbulence stemming from high inflation, elevated interest rates, and eroding consumer purchasing power. While we acknowledge that these headwinds could pressure 2023 operating performance, we believe that the consumer staples companies within our portfolio have ample headroom within their respective rating categories, and should generally be able to pass through most cost increases and exercise capital management in a balanced manner.

“We don’t expect to take any rating actions as a result of the broader sector trends in 2023, and we believe any rating actions will be driven by the evolution of the credit risk profiles of individual issuers instead,” notes Aarti Magan, Vice President, Diversified Industries.