Pricing power screener Excel templates exist because pricing power is the one fundamental factor that actually shows up in the income statement during inflation. When raw materials, wages, and shipping costs all rise at the same time, the businesses that can pass those costs through to customers without losing volume keep their gross margins flat or expanding. The businesses that cannot watch their margins compress quarter after quarter, even when revenue grows. That single distinction has separated the long-term compounders from the rest of the market across every inflationary regime since the 1970s, and it is the question that this Excel screener is built to answer with live data on your own watchlist. This guide explains how to build a pricing power screener in Excel using verified MarketXLS formulas, walks through every component of the included template, and shows how to combine gross margin, operating margin, three-year revenue growth, and return on equity into a single composite Pricing Power Score that you can rank, sort, and stress-test against five inflation regimes.
Key Metrics in a Pricing Power Screener (At a Glance)
| Metric | Why It Matters | Pricing Power Threshold | MarketXLS Formula |
|---|---|---|---|
| Gross Margin | First margin defended in inflation | Above 40% | =GROSSMARGIN("KO") |
| Operating Margin | Survives SG&A and R&D | Above 20% | =OPERATINGMARGIN("KO") |
| Net Profit Margin | Bottom-line resilience | Above 15% | =NETPROFITMARGIN("KO") |
| Revenue Growth (3Y) | Volumes hold or grow | Above 5% | =REVENUETHREEYEARS("KO") |
| Return on Equity | Capital efficiency | Above 15% | =RETURNONEQUITY("KO") |
| PE Ratio | Valuation context | Sector-relative | =PERATIO("KO") |
| Sector | Sector-relative benchmark | Diversified | =SECTOR("KO") |
These seven metrics, combined into a single Pricing Power Score, are the foundation of the screener template that this guide builds.
Why Pricing Power Matters Right Now (May 2026 Backdrop)
The May 2026 setup is exactly the kind of environment where pricing power earns its keep. Headline CPI has settled into a sticky 3 to 3.5 percent range that the Fed has been unable to crack despite holding the policy rate above 4 percent for the better part of two years. Q1 2026 earnings season, now mostly in the books, has revealed a clear bifurcation in S&P 500 results. About a third of the index reported expanding gross margins year over year. Another third reported flat margins. The final third saw margins compress by 100 basis points or more. Stock reactions have followed that bucketing almost mechanically, with the margin expanders trading on average eight percent above the index since results, the flat names roughly in line, and the compressors down twelve percent on average.
The structural argument for pricing power is even stronger than the tactical one. Warren Buffett's famous letter line, "the single most important decision in evaluating a business is pricing power," is not a slogan. It is a direct consequence of how inflation interacts with corporate income statements. When input costs rise faster than sales, gross margin compresses unless the seller can raise prices. Companies with weak brands, undifferentiated products, or thin contractual moats cannot raise prices without losing volume to substitutes. Companies with brand equity, switching costs, network effects, or scale-driven cost advantages can. The result is that during multi-year inflationary windows, margin spreads between pricing power leaders and laggards open up by 500 to 1000 basis points and stay open until inflation breaks.
The third reason pricing power matters in May 2026 is positioning. Quality and moat-factor ETFs have outperformed the equal-weight S&P 500 by roughly 400 basis points year to date, but most retail and even institutional portfolios remain underweight to these factors because they look "expensive" on a trailing P/E basis. The catch is that high-quality businesses almost always look expensive on trailing earnings; their multiples are forward-looking discounts of much higher future cash flows. A pricing power screener in Excel gives you a way to identify those names on your own watchlist, with your own thresholds, before the next leg of multiple expansion.
What a Pricing Power Screener Should Actually Measure
A real pricing power screen does not stop at the gross margin column. Gross margin is the input you start with, not the answer. The four lenses below each capture a different way pricing power shows up in financial statements.
1. Gross Margin (The First Defense)
Gross margin is revenue minus cost of goods sold, divided by revenue. It is the first margin defended in inflation because it sits at the top of the income statement, closest to the customer. A business with strong pricing power holds gross margin steady or expands it during input cost shocks. A business without pricing power sees gross margin compress every quarter that costs rise. The MarketXLS function =GROSSMARGIN("KO") returns this directly. For consumer staples, software, payment networks, and high-margin healthcare, gross margin above 40% is the typical pricing power signature. Above 60% is exceptional and usually indicates a moat that competitors cannot easily breach.
2. Operating Margin (The Real Test)
Operating margin is operating income divided by revenue, after SG&A and R&D. Where gross margin tests product-level pricing power, operating margin tests whether that pricing power survives the cost of running the business. A company can have a 70% gross margin and still have a single-digit operating margin if it spends heavily on advertising, salesforce, or R&D. The function =OPERATINGMARGIN("KO") returns operating margin. For pricing power leaders, operating margin above 20% is the standard cutoff. Above 30% is rare and almost always indicates a network or platform business with low marginal cost.
3. Revenue Growth (Volume Holds)
The cleanest test of pricing power is whether revenue keeps growing while margins expand. If a business raises prices and loses volume, revenue stalls. If a business raises prices and volume holds or grows, that is the textbook definition of pricing power. The function =REVENUETHREEYEARS("KO") returns the trailing three-year revenue per share growth rate. A three-year window is long enough to smooth out one-time effects and short enough to reflect current pricing dynamics. For pricing power leaders, revenue growth above 5% over three years confirms the pricing math is real.
4. Return on Equity (Capital Efficiency)
The final lens is whether the pricing power converts to shareholder returns. Return on equity measures net income divided by average shareholder equity and captures how efficiently capital is being deployed. The function =RETURNONEQUITY("KO") returns ROE. For quality and pricing power leaders, ROE above 15% is the standard threshold. Read ROE carefully, because companies that have aggressively bought back stock can show very high ROE on a depleted equity base. The Methodology sheet of the template flags this caveat.
Building the Pricing Power Screener in Excel
The template that accompanies this guide is built around a 28-stock universe of US large caps that have historically scored well on at least three of the four pricing power lenses above. The list is intentionally diversified across consumer staples, premium consumer discretionary, payment networks, software platforms, and high-margin healthcare so that the resulting Pricing Power Score is not just a sector bet on staples or software. The full watchlist:
| Sector | Tickers |
|---|---|
| Consumer Staples | KO, PEP, PG, CL, MDLZ, EL, MO, PM |
| Information Technology | MSFT, AAPL, ADBE, INTU, ORCL |
| Financials (Networks/Data) | V, MA, MCO, SPGI, MSCI |
| Consumer Discretionary | NKE, LULU, SBUX, MCD, HD, ULTA |
| Healthcare | LLY, ABBV, ISRG, DHR |
Each ticker is a candidate with a known moat: a brand household (KO, PEP, PG, CL), a global premium franchise (LVMH peers like EL, LULU), an institutional toll booth (V, MA, MCO, SPGI, MSCI), a software platform with high switching costs (MSFT, ADBE, INTU, ORCL), or a high-margin healthcare moat (LLY, ISRG, DHR). The watchlist is editable. Replace tickers in the Inputs sheet and the Dashboard, Sector Comparison, Sizing, and Scenario tabs all refresh automatically.
Sheet 1: Cover and How To Use
The Cover sheet is the table of contents and the first thing you hand to a colleague when sharing the file. It lists every sheet, the data-as-of date, and direct links to MarketXLS resources. The How To Use sheet is a five-minute tour from open to insight. It walks through the four input floors (gross margin, operating margin, revenue growth, ROE), explains how the screener filters, and shows how the score is built. Read this sheet first if you have never used a factor screener template before.
Sheet 2: Inputs
The Inputs sheet is the only place you ever type values. Cells B5 through B9 are yellow with gold borders. They control:
- Portfolio Size ($): Total capital allocated to the strategy. Defaults to $100,000.
- Gross Margin Floor (%): Minimum gross margin to pass the screen. Default 40%.
- Operating Margin Floor (%): Minimum operating margin. Default 20%.
- Revenue Growth Floor (%): Minimum trailing three-year revenue growth. Default 5%.
- ROE Floor (%): Minimum return on equity. Default 15%.
Tighten the floors and the screener gets stricter. Loosen them and the funnel widens. The Watchlist table sits below the inputs in rows 12 through 39. Every ticker, name, and sector is editable.
Sheet 3: Dashboard
The Dashboard is where the screener actually runs. The KPI tile row at the top reports five aggregate metrics:
- Median Gross Margin across the watchlist.
- Median Operating Margin across the watchlist.
- Median Net Profit Margin across the watchlist.
- Names Passing Screen (count of tickers that clear all four floors).
- Composite Score (median), the headline number for the watchlist.
Below the tile row, the Pricing Power Screener table shows ticker, company, sector, the four margin and growth metrics, ROE, P/E, market cap, the composite score, and a PASS/FAIL flag. The score column is conditionally formatted with a red-yellow-green color scale so the eye finds the leaders instantly. The market cap column has data bars to give a quick visual sense of size weight. The PASS/FAIL flag is a green-or-red pill that flips based on your input floors.
The composite Pricing Power Score uses the formula:
Score = 25% * MIN(GM/80*100, 100)
+ 25% * MIN(OM/50*100, 100)
+ 25% * MAX(MIN(Rev3Y/20*100, 100), 0)
+ 25% * MIN(ROE/50*100, 100)
Each component is scaled to a 0-100 range with practical caps. Gross margin saturates at 80%, operating margin at 50%, three-year revenue growth at 20%, and ROE at 50%. These caps prevent any single metric from dominating the score for outlier names like network businesses with 90%+ gross margins. The final score is a 0-100 reading where 70+ indicates a clear pricing power leader.
Sheet 4: Scenario Analysis
The Scenario Analysis sheet runs the watchlist through five inflation regimes:
| Regime | CPI YoY | Real GDP | Exp Rev Growth | Exp Gross Margin Shift | Aggregate Score |
|---|---|---|---|---|---|
| Deflation | -1.0% | -1.5% | +1.0% | -2.0pp | 35 |
| Disinflation | 1.5% | 1.5% | +4.5% | +0.5pp | 55 |
| Base Case | 2.5% | 2.0% | +6.5% | +1.0pp | 65 |
| Sticky Inflation | 4.5% | 1.0% | +8.0% | -0.5pp | 50 |
| Stagflation | 6.5% | -0.5% | +5.5% | -2.5pp | 30 |
The pattern is intuitive once you have seen it. Pricing power leaders look best in the base case and sticky inflation regimes, where they raise prices into a still-growing economy and competitors cannot. They look weakest in stagflation and deflation, where pricing power loses its premium because everyone is either fighting for shelf space (deflation) or watching real demand collapse faster than they can raise prices (stagflation). The aggregate score column is conditionally formatted so the regime sensitivity is visible at a glance. Use the regime that best matches your macro view, or run all five to stress test the watchlist.
Sheet 5: Position Sizing
The Position Sizing sheet tilts weight toward names with the highest composite score that pass the screen. The formula is:
Weight = (Score if PASS else 0) / SUM(Scores of all PASS names)
Dollar Allocation = Weight * Portfolio Size
Implied Shares = Dollar Allocation / =QM_Last(ticker)
The weighting scheme is deliberately simple: capital flows to names that pass the four floors, in proportion to their composite score. Names that fail the screen get a zero weight. The TOTAL row at the bottom confirms the weights sum to 100% and the dollars sum to the portfolio size you set on the Inputs sheet. If you want a different weighting scheme (equal weight, market-cap weight, score-squared weight), edit the formulas in column G and the rest of the sheet refreshes automatically.
Sheet 6: Sector Comparison
The Sector Comparison sheet has two tables. The first shows median gross margin, median operating margin, the sector benchmark gross margin, the count of watchlist names in each sector, and the count of names that pass the screen by sector. The second table is the per-stock spread vs sector benchmark gross margin. A stock with a 70% gross margin in a sector that runs 38% has a +32pp spread, which is the textbook signature of a pricing power leader. The spread column is conditionally formatted with a red-yellow-green color scale. The Strength column is a hard label that reads STRONG (spread above 10pp), MODERATE (spread between 0 and 10pp), or WEAK (negative spread).
Sector benchmarks in the template are hard-coded at:
- Consumer Staples: 38%
- Information Technology: 55%
- Financials: 60%
- Consumer Discretionary: 35%
- Healthcare: 55%
These reflect rough sector medians and are user-editable in column E of the spread table. Update them as the macro environment shifts.
Sheet 7: Methodology
The Methodology sheet spells out the score, the weights, the floors, and the watchlist selection rationale. It also lists the limitations: trailing fundamentals lag reality, gross margin is not directly comparable across sectors, and ROE can be inflated by buybacks against a depleted equity base. Read this sheet before sharing the file with a client or colleague who has not seen factor models before.
Sheet 8: Glossary and Disclaimer
The Glossary defines every metric in plain language and the Disclaimer notes that the template is for educational purposes only and is not investment advice. Pricing power is a hypothesis, not a guarantee. Margins are a backward-looking input. Brands, networks, and switching costs decay over time. Read the Disclaimer.
How To Use the Live Formula Version
The MarketXLS Formula Version of the template has zero static data. Every cell in the Dashboard, Sizing, Sector Comparison, and Scenario tables is a live MarketXLS function. Open the file in Excel with the MarketXLS add-in active, hit the recalc button, and the entire workbook refreshes against the latest fundamentals from MarketXLS data servers. The Inputs sheet stays as static yellow cells that you control.
A representative row in the Dashboard looks like this:
B13: KO
C13: Coca-Cola Company
D13: Consumer Staples
E13: =GROSSMARGIN(B13)*100
F13: =OPERATINGMARGIN(B13)*100
G13: =NETPROFITMARGIN(B13)*100
H13: =REVENUETHREEYEARS(B13)*100
I13: =RETURNONEQUITY(B13)*100
J13: =PERATIO(B13)
K13: =MARKETCAPITALIZATION(B13)/1000000000
L13: =MIN(E13/80*100,100)*0.25+MIN(F13/50*100,100)*0.25+MAX(MIN(H13/20*100,100),0)*0.25+MIN(I13/50*100,100)*0.25
M13: =IF(AND(E13>=Inputs!$C$6,F13>=Inputs!$C$7,H13>=Inputs!$C$8,I13>=Inputs!$C$9),"PASS","FAIL")
Replace KO in B13 with any ticker on your watchlist and the entire row recalculates. Add or remove rows on the Inputs sheet and the Dashboard does the same.
Download the templates:
- - Pre-filled with current data
- - Live-updating formulas
Reading the Pricing Power Score in Practice
A useful way to think about the composite Pricing Power Score is in three bands. Names scoring 75 and above are typically textbook pricing power businesses with high margins, double-digit revenue growth, and strong capital efficiency: V, MA, MSFT, ADBE, MSCI, MCO, SPGI, INTU, LLY all tend to land here. Names scoring 55 to 75 are solid pricing power businesses with one or two metrics that are merely good rather than exceptional: KO, PG, MCD, ABBV, NKE often sit in this band. Names scoring below 55 either have a margin profile that does not clear the floors, or revenue growth that has stalled, or both. EL and PFE-style names without volume tailwinds frequently land in this band.
The bands are not destiny. A name in the 55-75 band with accelerating gross margin and three-year revenue growth re-accelerating into the high single digits is a leading indicator of a name moving up into the 75+ band. Conversely, a 75+ name with margin compression and slowing growth in two consecutive quarters is a leading indicator of a name about to cede pricing power to a competitor. Watch the trajectory, not just the level.
How Pricing Power Compares to Other Factor Screens
Pricing power is one of several quality-adjacent factor screens an Excel user might run. The cleanest comparisons:
| Factor Screen | Primary Metric | When It Wins |
|---|---|---|
| Pricing Power | Gross Margin + Op Margin + Rev Growth | Inflation, sticky pricing |
| Low Volatility | Beta + IV + Realized Vol | Risk-off, late cycle |
| Quality (Q-factor) | ROE + ROIC + Earnings Stability | Bear markets, recessions |
| Moat | Wide moat ratings + ROIC | Long-horizon compounding |
| GARP | PEG + EPS Growth + ROE | Mid-cycle, cyclical recovery |
These factors overlap heavily. Most pricing power leaders also score well on quality and moat factors. The overlap is the point: a name that prints in the top quintile on three or four factor screens at once is a candidate for a long-term core position, while a name that scores well on only one factor is more of a specialty exposure that may be tactical.
FAQ: Pricing Power Screener Excel
What is the simplest definition of pricing power?
Pricing power is the ability to raise selling prices without losing customer volume. It shows up in financial statements as gross margin that holds steady or expands during periods of input cost inflation. Companies with strong brands, network effects, switching costs, or scale advantages tend to have pricing power. Companies selling commodities or undifferentiated products do not.
Which MarketXLS function gives gross margin?
The function =GROSSMARGIN("AAPL") returns the gross margin for Apple as a decimal (multiply by 100 for a percentage). The function pulls from MarketXLS fundamental data and updates whenever the ticker reports new financials. Pair it with =OPERATINGMARGIN("AAPL") for operating margin and =NETPROFITMARGIN("AAPL") for net margin.
How do I tell if a company is losing pricing power?
Watch the trajectory of gross margin and revenue growth together. A company losing pricing power will see gross margin compress two or three quarters in a row even if revenue still grows, because growth is being purchased through promotions or higher input cost absorption. A company gaining pricing power will see gross margin expand even when revenue growth is modest. The Scenario Analysis sheet of the template provides hypothetical regime scenarios, but the cleanest signal is in the actual reported margin trajectory.
Why is gross margin not directly comparable across sectors?
Different industries have structurally different cost structures. Software companies report 70-90% gross margins because the marginal cost of distributing a software license is near zero. Retailers like HD or COST report 25-35% gross margins because cost of goods sold dominates the income statement. Comparing a software company's gross margin to a retailer's gross margin is meaningless. The Sector Comparison sheet of the template handles this by computing the spread of each stock's gross margin against a hard-coded sector benchmark.
Can a company with low gross margin still have pricing power?
Yes, but it usually shows up in operating margin or revenue growth instead. Costco runs single-digit operating margins by design, but its membership economics give it pricing power against suppliers and customers. Walmart runs roughly 25% gross margins, far below a software peer, but its scale gives it leverage on costs that smaller competitors cannot match. The composite Pricing Power Score is designed to capture these cases by weighting four metrics, not just gross margin.
How often should I re-run the screener?
Once a quarter is sufficient, since the underlying metrics (gross margin, operating margin, revenue growth, ROE) all come from quarterly financials and only update when new earnings are reported. The Live Formula Version of the template will refresh automatically when MarketXLS data servers update; you do not need to manually edit anything. The most useful time to re-run the screen is the week after the bulk of S&P 500 earnings reports have come in, which is roughly four to six weeks after each calendar quarter end.
The Bottom Line
A pricing power screener Excel template is not a stock picker. It is a filter that surfaces the businesses most likely to defend their margins through the next inflation cycle so you can focus your research where it matters. The four-floor screen (gross margin above 40%, operating margin above 20%, three-year revenue growth above 5%, ROE above 15%) is a useful starting point that catches most large-cap pricing power leaders without false positives. The composite Pricing Power Score gives you a single number to rank by. The Scenario Analysis sheet stress tests the watchlist against five inflation regimes. The Sector Comparison sheet keeps cross-sector comparisons honest with sector-relative benchmarks. The Position Sizing sheet turns the score into a starter allocation.
Use the template as a starting framework. Edit the watchlist to match your own coverage universe. Tighten or loosen the floors as the macro regime shifts. Replace the equal-weighted score with your own factor recipe. The hard work of pricing power investing is reading the qualitative case for each company's moat, but the quantitative filter is what makes that work scalable across a watchlist of dozens or hundreds of names.
Want to extend this further with full live data for every fundamental in your spreadsheet, including earnings transcripts, intraday quotes, options chains, and 1,100+ Excel functions? Visit marketxls.com for the platform overview and marketxls.com/book-demo to see a live walkthrough of the pricing power screener with your own watchlist.
This template and analysis are for educational purposes only and do not constitute investment advice. Past performance does not guarantee future results. Margin metrics are backward-looking and may not reflect current pricing dynamics. Verify all data independently before making any investment decision.
