Summary Consumer discretionary stocks have come under pressure in recent months, and we want to know what’s priced in. We use a three-pronged approach to assess valuations at the individual stock level: (i) we analyze how consensus revenue expectations compare to ‘normal’, (ii) we estimate company-level operating leverage, and (iii) we use historical multiples to help us understand what type of beat/miss is being priced in. Consumer Durables: Consensus estimates call for companies in the

Summary Most categories of consumption are in an over-bought or under-bought position. Housing has a foot in each camp. Over the past two years, home sales were a million units above trend, but coming into the pandemic sales were 3 million units below trend. Demographics are likely to offer some support from this point forward, but the direction of mortgage rates will probably rule the day. We expect the surge in rates to drive a

Summary Prior to the pandemic, e-Commerce growth had been outpacing brick-and-mortar sales by 10 percentage points. That differential spiked to 40 points at the onset of the pandemic and then fell sharply in the following year. We’re of the mind that e-Commerce penetration is likely to head higher from this point forward, and we built a framework that assesses the vulnerability of 60 consumer stocks. Amazon added an average of 20 million square feet to

Summary In our inaugural report we assessed whether the consumer would buckle under pressure or power through. We concluded that the tailwinds are strong enough to enable solid mid-single digit consumption growth in 2022. This report focuses on how that growth might look across the income spectrum with a focus on the low-end consumer. We built a few models to help frame our outlook for the low end. One tracks monthly spending for ~30 categories

Introducing Rubinson Research I am pleased to share this report with you.  It’s the first one being issued by my newly formed research boutique, Rubinson Research.  I founded the firm with the explicit goal of identifying and quantifying complex issues that are top-of-mind for CIOs, portfolio managers and industry analysts.  We will specialize in blending high-level macro insights with granular micro data.  The firm is subscription-based and if you’d like to subscribe, please reply to this