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The Zacks Analyst Blog Highlights: Asbury Automotive Group, The Buckle, Sportsmans Warehouse, Papa John's International and eBay
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For Immediate Release
Chicago, IL – June 18, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Asbury Automotive Group, Inc. (ABG - Free Report) , The Buckle, Inc. (BKE - Free Report) , Sportsmans Warehouse Holdings, Inc. (SPWH - Free Report) , Papa John's International, Inc. (PZZA - Free Report) and eBay Inc. (EBAY - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
Record Retail Sales Lift Hopes of V-Shaped Recovery: 5 Picks
U.S. shoppers took to shopping malls and auto dealerships in May as states are gradually easing restrictions on business activity that were put in place to curb the spread of the novel coronavirus.
Sales at U.S. retailers that measure purchases at stores, restaurants and online, rose 17.7% last month, the biggest monthly jump ever. May’s retail sales figure topped the record 6.7% jump in October 2001, a month after the 9/11 terrorist attack, and easily surpassed analysts’ expectations of an 8.5% increase. Meanwhile, April’s plunge in retail sales was revised to be a little more moderate than previously reported (-14.7% versus -16.4%).
Sales at auto dealers, which mostly generate one-fifth of all retail outlays, surged 44%. Excluding motor vehicles, retail sales still rose a healthy 12.4%. And clothing and accessories stores registered the biggest jump in sales, up 188% while book stores, sales at sporting goods and musical instrument stores rose 88.2%.
Sales also increased almost 13% at gas stations, indicating Americans are hitting the road and visiting their preferred stores. Bars and restaurants that bore the brunt of the shutdown measures in March and April also saw receipts increase 29% in May.
Last but not the least, Internet retailers, one of the few bright spots amid the pandemic, recorded a 9% gain in sales. But grocery sales somehow managed to record a meager gain of 1.3% in sales following a record spike of 14.4% in April.
So, what drove retail sales? There are good reasons for the rebound in retail sales. It’s absolutely clear that fiscal aid in the form of stimulus checks, extra jobless benefits and contributions to salaries paid by small business houses have given Americans the wherewithal to spend at shopping outlets. Notably, the extra $600 per week in unemployment benefit has given households the required income and confidence to spend.
Moreover, monetary support in the form of a low interest rate environment also lifted shoppers’ spirits. The Fed had trimmed the benchmark federal funds rate a full percentage point to a range of zero to 0.25% in order to pump cash into the financial system and help banks provide more loans to households.
It’s worth pointing out that this sharp rebound in retail sales is a telltale sign that the American economy is headed for a V-shaped recovery. This is because retail sales account for 42% of consumer spending, which in turn is nearly 70% of total gross domestic product (GDP). So, retail sales account for just under a third of GDP and May’s bounce back will invariably lead to an upward revision of second-quarter GDP.
The Big Winners
Given the positives, retailers are set to witness a strong rally. To top it, American consumers are confident about their well-being, and that’s a bonanza for retailers as well. According to the Conference Board, the consumer confidence index went up to 86.6 in May from a revised 85.7 in April. At the same time, the index that measures how Americans feel about their income, business, economic and labor market conditions in the next six months, or the so-called future expectations index, edged up to 96.9 from 94.3.
Hence, it will be prudent to invest in five of the best retail stocks. Such stocks have a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Asbury Automotive Group, Inc. is one of the largest automotive retailers. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has risen 8.7% over the past 30 days. The company’s expected earnings growth rate for the next five years is 18.5%.
The Buckle, Inc. retails casual apparel, footwear, and accessories for young men and women in the United States. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-quarter earnings has moved up more than 100% over the past 30 days. The company’s expected earnings growth rate for the next year is 39.8%.
Sportsmans Warehouse Holdings, Inc. is an outdoor sporting goods retailer. The company's stores also provide clothing products, footwear products and optics, electronics, and accessories. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has moved 20.3% north over the past 60 days. The company’s expected earnings growth rate for the current year is 63.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Papa John's International, Inc. operates and franchises pizza delivery and carryout restaurants under the Papa John's trademark in the United States. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has risen 13.8% over the past 60 days. The company’s expected earnings growth rate for the current year is 26.5%.
eBay Inc. operates as an online shopping site that allows visitors to browse through available products listed for sale or auction through each company's online storefront. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has climbed 14.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 21.9%.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Asbury Automotive Group, The Buckle, Sportsmans Warehouse, Papa John's International and eBay
For Immediate Release
Chicago, IL – June 18, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Asbury Automotive Group, Inc. (ABG - Free Report) , The Buckle, Inc. (BKE - Free Report) , Sportsmans Warehouse Holdings, Inc. (SPWH - Free Report) , Papa John's International, Inc. (PZZA - Free Report) and eBay Inc. (EBAY - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
Record Retail Sales Lift Hopes of V-Shaped Recovery: 5 Picks
U.S. shoppers took to shopping malls and auto dealerships in May as states are gradually easing restrictions on business activity that were put in place to curb the spread of the novel coronavirus.
Sales at U.S. retailers that measure purchases at stores, restaurants and online, rose 17.7% last month, the biggest monthly jump ever. May’s retail sales figure topped the record 6.7% jump in October 2001, a month after the 9/11 terrorist attack, and easily surpassed analysts’ expectations of an 8.5% increase. Meanwhile, April’s plunge in retail sales was revised to be a little more moderate than previously reported (-14.7% versus -16.4%).
Sales at auto dealers, which mostly generate one-fifth of all retail outlays, surged 44%. Excluding motor vehicles, retail sales still rose a healthy 12.4%. And clothing and accessories stores registered the biggest jump in sales, up 188% while book stores, sales at sporting goods and musical instrument stores rose 88.2%.
Sales also increased almost 13% at gas stations, indicating Americans are hitting the road and visiting their preferred stores. Bars and restaurants that bore the brunt of the shutdown measures in March and April also saw receipts increase 29% in May.
Last but not the least, Internet retailers, one of the few bright spots amid the pandemic, recorded a 9% gain in sales. But grocery sales somehow managed to record a meager gain of 1.3% in sales following a record spike of 14.4% in April.
So, what drove retail sales? There are good reasons for the rebound in retail sales. It’s absolutely clear that fiscal aid in the form of stimulus checks, extra jobless benefits and contributions to salaries paid by small business houses have given Americans the wherewithal to spend at shopping outlets. Notably, the extra $600 per week in unemployment benefit has given households the required income and confidence to spend.
Moreover, monetary support in the form of a low interest rate environment also lifted shoppers’ spirits. The Fed had trimmed the benchmark federal funds rate a full percentage point to a range of zero to 0.25% in order to pump cash into the financial system and help banks provide more loans to households.
It’s worth pointing out that this sharp rebound in retail sales is a telltale sign that the American economy is headed for a V-shaped recovery. This is because retail sales account for 42% of consumer spending, which in turn is nearly 70% of total gross domestic product (GDP). So, retail sales account for just under a third of GDP and May’s bounce back will invariably lead to an upward revision of second-quarter GDP.
The Big Winners
Given the positives, retailers are set to witness a strong rally. To top it, American consumers are confident about their well-being, and that’s a bonanza for retailers as well. According to the Conference Board, the consumer confidence index went up to 86.6 in May from a revised 85.7 in April. At the same time, the index that measures how Americans feel about their income, business, economic and labor market conditions in the next six months, or the so-called future expectations index, edged up to 96.9 from 94.3.
Hence, it will be prudent to invest in five of the best retail stocks. Such stocks have a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Asbury Automotive Group, Inc. is one of the largest automotive retailers. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has risen 8.7% over the past 30 days. The company’s expected earnings growth rate for the next five years is 18.5%.
The Buckle, Inc. retails casual apparel, footwear, and accessories for young men and women in the United States. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-quarter earnings has moved up more than 100% over the past 30 days. The company’s expected earnings growth rate for the next year is 39.8%.
Sportsmans Warehouse Holdings, Inc. is an outdoor sporting goods retailer. The company's stores also provide clothing products, footwear products and optics, electronics, and accessories. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has moved 20.3% north over the past 60 days. The company’s expected earnings growth rate for the current year is 63.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Papa John's International, Inc. operates and franchises pizza delivery and carryout restaurants under the Papa John's trademark in the United States. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has risen 13.8% over the past 60 days. The company’s expected earnings growth rate for the current year is 26.5%.
eBay Inc. operates as an online shopping site that allows visitors to browse through available products listed for sale or auction through each company's online storefront. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has climbed 14.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 21.9%.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.