Shares of Campbell Soup Co., Conagra Brands Inc. and other packaged food companies rose on Monday -- an investor reaction to widespread reports that shoppers are stocking up their pantries as the coronavirus rapidly spreads across the world.
“Anticipation of disruption is driving stockpiling now,” Piper Sandler analyst Michael Lavery said in a research note. “We believe from anecdotes that consumers are already stocking up on non-perishable food, as grocery stores see surges in traffic and larger baskets.”
Campbell rose as much as 5.1 per cent on Monday, the stock’s biggest intraday gain in six months. Most packaged-food makers also rose and outpaced the gain of the S&P 500, including Conagra, General Mills Inc. and Kellogg Co. The S&P 500’s packaged food index, which also includes companies such as Hershey Co. and Mondelez International Inc., rose as much as 3.1 per cent.
Investors are looking for potential beneficiaries from the outbreak of coronavirus that has sparked alarm as it spreads beyond its origin in China.
“We believe U.S. consumers are preparing to be able to stay at home for extended periods, and some food categories may benefit more than others,” Lavery said.
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