Consumer Discretionary and Staples Sector Enters Expansion Territory Amid Raised Spending Activities

Uptrend in Macro Parameters to Support Sector’s Resilience

Retail Trend Witnesses an Upward Trajectory

Select Forecasts from the Australian Bureau of Agricultural and Resource Economics

Index Performance

Risks and Challenges

Outlook

II. Investment theme and stocks under discussion (AAC, CCX, TWE)

After understanding the sector, let us now look at four companies listed on the ASX. The price potential of the companies under discussion has been analysed based on the ‘Price/Book Value’ multiple method.

1. ASX: AAC (Australian Agricultural Company Limited)  

(Recommendation: Buy, Potential Upside: Low Double-Digit, Mcap: AUD 1.09bn)

AAC is engaged in the production of Wagyu beef and grain-fed beef. It also provides backgrounding, breeding, and feed lotting.

2. ASX: CCX (City Chic Collective Limited)

(Recommendation: Buy, Potential Upside: Low Double-Digit, Mcap: AUD 557.71mn)

CCX is engaged in the retailing of women's apparel. It is a collective of consumer-led brands, including City Chic, Avenue, Evans, CCS, Hips & Curves, and Fox & Royal.

3. ASX: TWE (Treasury Wine Estates Limited)

(Recommendation: Hold, Potential Upside: Low Double-Digit, Mcap: AUD 8.37bn)

TWE is harvesting and sourcing grapes, producing, selling, and distributing wine.

Comparative Price Chart

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 21 July, 2022. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.

Disclaimer

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