Research

The Value of Pricing Power When Investors Benchmark to Headline Inflation
(with Alexander F. Wagner)

We study equity valuation when investors benchmark firms against headline inflation although pass-through varies across firms. In standard valuation, inflation is valueneutral even with heterogeneous pass-through if investors use firm-specific inflation. Benchmarking to headline inflation conflates nominal cash-flow growth with real performance and shifts discount rates at inflation announcements. Pricing power shapes both channels by enabling greater pass-through and reducing perceived inflation exposure. Empirically, higher-pricing-power firms exhibit smaller stock-price declines and smaller cost-of-capital increases following inflation surprises. The April 2025 tariff announcement yields similar pricing-power-based return differences. These results offer new insights into inflation's implications for asset pricing and valuation.

Link to paper 

Conferences and Seminars (* scheduled): 2nd Lake District Workshop in Corporate Finance 2025, Tri-City Bridge Workshop on Empirical Research in Finance 2025, AFA Annual Meeting 2025 (Poster Session), BBLS Seminar at the University of Zurich Fall 2024, SFI Research Days 2024.

The Role of Financial Markets in Corporate Inflation Transmission (single-authored)