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Fed keeps rates at 3.5-3.75% as inflation risks rise due to oil prices and geopolitical tensions.
LSF sees over 100% earnings growth with estimates surging more than 100% in 60 days.
BGS and SFD gain from estimate revisions, with steady growth and defensive sector positioning.
The Federal Reserve left interest rates unchanged at the end of its two-day policy meeting on Wednesday. Stocks fell following the announcement, as investors’ concerns grew over the economy’s health. Inflation has surged lately, and the ongoing geopolitical tensions have already pushed up global oil prices.
Understandably, the Federal Reserve has adopted a cautious approach, and a rate cut is unlikely anytime soon, until inflation shows signs of declining. We, thus, recommend buying three defensive stocks from the consumer staples sector, namely, Laird Superfood, Inc. (LSF - Free Report) , B&G Foods, Inc. (BGS - Free Report) and Smithfield Foods, Inc. (SFD - Free Report) .
These stocks have seen positive earnings estimate revisions in the past 60 days, carry a Zacks Rank #1 (Strong Buy) or 2 (Buy), and are set for solid returns. You can see the complete list of today’s Zacks #1 Rank stocks here.
No Rate Cut as Economic Concerns Grow
The Federal Reserve’s decision to keep interest rates unchanged was highly anticipated. However, the Federal Reserve warned that the economy’s health could worsen further owing to the steep hike in oil prices seen since the beginning of the U.S.-Iran conflict on Feb. 28.
The overall inflation could rise further due to the sky-high oil prices, Federal Reserve Chairman Jerome Powell said at the end of the Fed’s two-day FOMC meeting, wherein policymakers voted 8-4 to keep interest rates unchanged in the present range of 3.5-3.75%.
The Federal Reserve hasn’t cut interest rates this year as inflation showed signs of rising. Inflation has remained a concern for both consumers and the Federal Reserve. The Commerce Department reported earlier this month that the consumer price index (CPI) climbed 0.9% in March after rising 2.4% in February, pushing the annual inflation rate to 3.3% — its highest level since May 2024.
The ongoing Middle East crisis has further increased the risks of a spike in inflation, with Trump reportedly asking his aides to extend the blockade at the Strait of Hormuz after rejecting Iran’s request. Also, there are no signs of negotiations, with both the warring nations calling off the second round of peace talks.
3 Consumer Staple Stocks With Upside
Laird Superfood
Laird Superfood, Inc. provides plant-based superfood products. LSF is based in Sisters, OR.
Laird Superfood has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the last 60 days. LSF has a Zacks Rank #2.
B&G Foods
B&G Foods, Inc. boasts of a diversified portfolio of more than 45 brands, including B&G, B&M, Cream of Wheat, Las Palmas, Mama Mary's, Maple Grove Farms, Mrs. Dash, New York Style, Ortega, Pirate's Booty, Polaner, SnackWell's, Spice Islands and Victoria. Many of these brands hold leading market shares in different regions. BGS frequently engages in acquisitions and innovations to further strengthen its portfolio.
B&G Foods has an expected earnings growth rate of 5.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 8% over the last 60 days. BGS has a Zacks Rank 2. It has a beta of 0.46 and a current dividend yield of 14.21%.
Smithfield Foods
Smithfield Foods, Inc. is a pork producer and food-processing company. SFD is based in Smithfield, VA.
Smithfield Foods has an expected earnings growth rate of 7.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 11.8% over the last 60 days. SFD carries a Zacks Rank 2.
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Fed Keeps Interest Rates Unchanged: 3 Consumer Staples Stocks to Buy
Key Takeaways
The Federal Reserve left interest rates unchanged at the end of its two-day policy meeting on Wednesday. Stocks fell following the announcement, as investors’ concerns grew over the economy’s health. Inflation has surged lately, and the ongoing geopolitical tensions have already pushed up global oil prices.
Understandably, the Federal Reserve has adopted a cautious approach, and a rate cut is unlikely anytime soon, until inflation shows signs of declining. We, thus, recommend buying three defensive stocks from the consumer staples sector, namely, Laird Superfood, Inc. (LSF - Free Report) , B&G Foods, Inc. (BGS - Free Report) and Smithfield Foods, Inc. (SFD - Free Report) .
These stocks have seen positive earnings estimate revisions in the past 60 days, carry a Zacks Rank #1 (Strong Buy) or 2 (Buy), and are set for solid returns. You can see the complete list of today’s Zacks #1 Rank stocks here.
No Rate Cut as Economic Concerns Grow
The Federal Reserve’s decision to keep interest rates unchanged was highly anticipated. However, the Federal Reserve warned that the economy’s health could worsen further owing to the steep hike in oil prices seen since the beginning of the U.S.-Iran conflict on Feb. 28.
The overall inflation could rise further due to the sky-high oil prices, Federal Reserve Chairman Jerome Powell said at the end of the Fed’s two-day FOMC meeting, wherein policymakers voted 8-4 to keep interest rates unchanged in the present range of 3.5-3.75%.
The Federal Reserve hasn’t cut interest rates this year as inflation showed signs of rising. Inflation has remained a concern for both consumers and the Federal Reserve. The Commerce Department reported earlier this month that the consumer price index (CPI) climbed 0.9% in March after rising 2.4% in February, pushing the annual inflation rate to 3.3% — its highest level since May 2024.
The ongoing Middle East crisis has further increased the risks of a spike in inflation, with Trump reportedly asking his aides to extend the blockade at the Strait of Hormuz after rejecting Iran’s request. Also, there are no signs of negotiations, with both the warring nations calling off the second round of peace talks.
3 Consumer Staple Stocks With Upside
Laird Superfood
Laird Superfood, Inc. provides plant-based superfood products. LSF is based in Sisters, OR.
Laird Superfood has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the last 60 days. LSF has a Zacks Rank #2.
B&G Foods
B&G Foods, Inc. boasts of a diversified portfolio of more than 45 brands, including B&G, B&M, Cream of Wheat, Las Palmas, Mama Mary's, Maple Grove Farms, Mrs. Dash, New York Style, Ortega, Pirate's Booty, Polaner, SnackWell's, Spice Islands and Victoria. Many of these brands hold leading market shares in different regions. BGS frequently engages in acquisitions and innovations to further strengthen its portfolio.
B&G Foods has an expected earnings growth rate of 5.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 8% over the last 60 days. BGS has a Zacks Rank 2. It has a beta of 0.46 and a current dividend yield of 14.21%.
Smithfield Foods
Smithfield Foods, Inc. is a pork producer and food-processing company. SFD is based in Smithfield, VA.
Smithfield Foods has an expected earnings growth rate of 7.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 11.8% over the last 60 days. SFD carries a Zacks Rank 2.