UBS flags Top Picks in European Food & HPC on Pricing Power Edge

UBS says the European food and household & personal care (HPC) sector looks attractive due to relatively low valuations, strong pricing power to pass on commodity costs and limited direct exposure to the Middle East (~3% of sales). The bank flagged near-term risks from consumer affordability and input-cost timing mismatches but emphasized the sector’s defensive earnings visibility. UBS named Reckitt Benckiser and Danone as preferred picks, noting Reckitt trades at roughly a 20% valuation discount to the sector and could re-rate on sustained revenue momentum and efficiency gains, while Danone benefits from growth in health-and-wellness categories (infant formula in China, medical nutrition, high-protein dairy). The call is likely to support investor interest in European food/HPC stocks and could help limit downside in a softer macro backdrop.