Consumer staples stocks are solid insurance policies in frothy markets ripe for corrections. But they’re also double-edged swords as they often lag in booming conditions, and this pattern has persisted recently. Over the past six months, the industry has recorded a loss of 3.9%, a far cry from the S&P 500’s 8.4% ascent.
The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. Keeping that in mind, here is one consumer stock boasting a durable advantage and two that may face trouble.
Two Consumer Staples Stocks to Sell:
Pilgrim's Pride (PPC)
Market Cap: $6.94 billion
Offering everything from pre-marinated to frozen chicken, Pilgrim’s Pride (NASDAQ:PPC) produces, processes, and distributes chicken products to retailers and food service customers.
Why Does PPC Worry Us?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 2.2% over the last three years was below our standards for the consumer staples sector
- Demand is forecasted to shrink as its estimated sales for the next 12 months are flat
- Easily substituted products (and therefore stiff competition) result in an inferior gross margin of 12.7% that must be offset through higher volumes
Pilgrim's Pride is trading at $29.16 per share, or 11.3x forward P/E. To fully understand why you should be careful with PPC, check out our full research report (it’s free).
Estée Lauder (EL)
Market Cap: $30.26 billion
Named after its founder, who was an entrepreneurial woman from New York with a passion for skincare, Estée Lauder (NYSE:EL) is a one-stop beauty shop with products in skincare, fragrance, makeup, sun protection, and men’s grooming.
Why Is EL Not Exciting?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Poor expense management has led to an operating margin of -0.7% that is below the industry average
- Earnings per share decreased by more than its revenue over the last three years, partly because it diluted shareholders
Estée Lauder’s stock price of $82.87 implies a valuation ratio of 27.2x forward P/E. Read our free research report to see why you should think twice about including EL in your portfolio.
One Consumer Staples Stock to Watch:
e.l.f. Beauty (ELF)
Market Cap: $4.69 billion
Short for "eyes, lips, face", e.l.f. Beauty (NYSE:ELF) is a developer of high-quality beauty products at accessible price points.
Why Do We Watch ELF?
- Annual revenue growth of 41.4% over the past three years was outstanding, reflecting market share gains
- Unique products and pricing power lead to a best-in-class gross margin of 71%
- Earnings per share grew by 23.8% annually over the last three years and trumped its peers
At $79.63 per share, e.l.f. Beauty trades at 22.3x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.