Difficult' First Half Seen For Consumer Products

Difficult' First Half Seen For Consumer Products - JP Morgan

J.P. Morgan Chase (JPM) analysts predicted that the next six months will be tough going for many of the biggest U.S. beverage and household-products companies.

The firm downgraded its investment rating on shares in giants Coca-Cola Co. (KO), Colgate-Palmolive Co. (CL) and Alberto-Culver Co. (ACV) Friday, all to a neutral rating from overweight.

The analysts led by John Faucher forecast a "difficult" first half for the sector and "sluggish top-line growth due to a weak consumer." They foresee weakness in the stocks even if markets rise, as most analysts predict.

J.P. Morgan's downbeat consumer comments came on the morning the U.S. government's December unemployment report showed higher-than-expected job losses, with the unemployment rate at 10%, just under consensus.

The firm's caution on the shares also highlighted worries on valuation. "We think cheaper stocks will be better protected from disappointing top-line growth," the analysts wrote.

Shares in Coca-Cola fell 2.26% to $54.92 in recent Friday morning trading, while Colgate-Palmolive was down 1.69% to $81.60 and Alberto-Culver was down 2.16% to $29.05.

-By Brendan Conway, Dow Jones Newswires; (212) 416-2670; brendan.conway@dowjones.com

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