Pricing Power Everywhere

Steve Hou

Research

16 Pages

Bloomberg Indices examines how corporate pricing power can be defined and measured across global equity markets. The author focuses on gross margin stability as the core signal of pricing power and uses it to build systematic indices. These portfolios highlight companies that can sustain profitability when costs rise, offering a lens into business resilience rather than short term pricing moves.

Date published: October 2023

Key Takeaways

Pricing power definition: Focuses on firms that keep gross margins stable while passing higher costs to customers.
Simple measurement framework: Uses historical gross margin variability to rank companies and identify durable pricing power across sectors.
Portfolio construction insight: Pricing power indices tilt toward quality businesses with resilient margins and more stable performance across market environments.
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