Shivani Kumaresan
5 min read
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Consumer Staples Select Sector SPDR Fund rose 0.74%, for a fifth straight week of gains, while the Consumer Discretionary fund climbed 1.91%.
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EVgo and Helen of Troy drew takeover proposals, and Magnite delivered a second consecutive “beat-and-raise” quarter.
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DraftKings slashed its outlook, Dutch Bros drew a wave of price-target cuts, and Tesla slid on merger doubts.
Consumer stocks again outperformed a rattled broader market last week, with EVgo (EVGO), Helen of Troy (HELE) and Magnite (MGNI) leading the gains as investors reacted to buyout proposals and strong earnings. Dutch Bros (BROS), DraftKings (DKNG) and Tesla (TSLA) were among the laggards.
The Consumer Staples Select Sector SPDR Fund (XLP) rose 0.74%, while the Consumer Discretionary Select Sector SPDR Fund (XLY) gained 1.91%.
Consumer Sector ETFs Shrug Off Market Rout
During the week of Nov. 2 to Nov. 6, XLP gained for a fifth straight week, suggesting investors kept leaning on defensive staples. XLY rose for a third straight week, pointing to returning appetite for discretionary names.
In comparison, the SPDR S&P 500 ETF Trust (SPY) fell 2.70%, its worst week in 18 months. The tech-heavy Invesco QQQ Trust (QQQ) dropped 4.98%, marking its fourth straight down week.
EVgo Jumps On Majority Owner’s Buyout Bid
EVgo stock led the weekly gainers, surging 45%, after the fast-charging network operator disclosed an unsolicited, non-binding proposal from LS Power Equity Advisors to acquire all Class A shares it doesn’t already own for $2 per share in cash. LS Power holds about 56% of EVgo’s combined voting power.
The board has formed a special committee of independent directors to evaluate the proposal and may retain its own legal and financial advisors. Analysts turned cautious. Cantor Fitzgerald’s Andres Sheppard downgraded the stock to ‘Neutral’ from ‘Overweight’ and cut his price target to $2 from $3. He noted the offer is a “non-binding expression of interest only,” but said LS Power is prepared to move immediately to finalize a deal. UBS’s Jon Windham also downgraded EVgo to ‘Neutral’ from ‘Buy’ with a $2 target, down from $3.
Helen Of Troy Rejects $37 Offer
Helen of Troy stock climbed 29% over the week after Empower Brands Holdings Group, jointly owned by Spectrum Brands (SPB) and Oaktree Capital Management, proposed to buy the company for $37 per share in cash, an implied enterprise value of about $1.6 billion. An Empower affiliate already owns around 4.5% of the company.
