Consumer staple stocks underperformed broader equity markets for most of 2023, but an analyst says there are opportunities in the space that investors can take advantage of this year.

Filippo Falorni, vice president and equity research analyst at Citi, told BNN Bloomberg that he expects consumer staple stocks, viewed by many investors as bond proxies, will deliver good returns this year as the U.S. economy continues to slow.

“The consumer has been more resilient than expected … and as a result, sectors that are more offensive have performed better than staples, which tend to perform better when you have more concerns around the (macroeconomics),” Falorni said in a Friday television interview.

“We’re starting to see a little bit of a slowdown in consumer spending … so I think staples in general can become more of a preferred sector as we head into particularly the second half of 2024.”

Falorni recommended Clorox (CLX, NYSE), Colgate (CL, NYSE) and Constellation Brands (STZ, NYSE) as his top picks in the consumer staples sector.

Neither Falorni nor his family own shares of the stocks mentioned above, but Clorox and Colgate are investment banking clients at his firm, and shares of Colgate and Constellation Brands are owned by his clients and his firm.

For the full interview, click on the video at the top of this article.