We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
4 Stocks to Buy on a Solid Rebound in Consumer Sentiment
Read MoreHide Full Article
Soaring inflation has been crippling trade and people have been compelled to spend cautiously. However, prices have been cooling over the past couple of months, which has given a boost to consumer sentiment lately. The University of Michigan's preliminary December reading showed that consumer sentiment improved in January for the second consecutive month.
A number of factors have been playing key roles in the improvement of consumer sentiment. People are regaining their lost confidence thanks to increases in earnings, a decline in the cost of consumer items, and the Fed finally going slow on its pace of interest rate hikes.
Given this scenario, consumer sentiment is finally increasing, helping stocks like Bowlero Corp. (BOWL - Free Report) , Hilton Grand Vacations Inc. (HGV - Free Report) , OneSpaWorld Holdings Limited (OSW - Free Report) and Wyndham Hotels & Resorts, Inc. (WH - Free Report) .
Consumer Sentiment Rebounding
The University of Michigan's preliminary December consumer sentiment index reading rose 64.6 in January from December’s reading of 59.7 to hit an eight-month high. January’s reading was also higher than the consensus estimate of 60.5. Also, the assessment for both the future and current conditions improved in January.
The reading for one-year inflation expectations also dropped to 4% in January from 4.4% in the previous month. This is the lowest level in 16 months, and the fourth consecutive month of rise, which once again proves that people are gradually regaining confidence and still believe in a fast economic recovery.
The current economic conditions index also climbed to 68.6 in January from 59.4 in the previous month, reflecting a significant improvement in consumers' assessments of the state of the economy.
Consumer sentiment has recently been improving owing to several factors. Consumer sentiment was low over the past several months as rising prices and the Fed's aggressive rate hike policy had stoked concerns about an impending economic recession.
These concerns have been gradually fading as prices have been cooling lately. Although prices are still high, wholesale inflation in December fell for the seventh consecutive month, suggesting that inflationary pressures have finally begun to ease.
The Labor Department said last week that the consumer price index (CPI) in December fell to 6.5% from 7.1% in November 2022 on a year-over-year basis. This was the smallest increase since October 2021. On a month-over-month basis, inflation dropped 0.1% in December after rising 0.1% in November.
The core CPI, which excludes the volatile energy and food prices, rose 5.7% year over year in December compared to 6% in November. Month over month, core CIP increased 0.3% in December after rising 0.2% in the previous month.
The Fed finally had earlier indicated that it could go slow on its aggressive rate hike policy. In December, the Fed increased interest rates by 50 basis points after hiking rates by 75 basis points on four consecutive occasions.
A lower interest hike is an indication that inflation is finally easing. Also, wages are still on the rise, giving people the power to purchase. This saw record retail sales during the holiday period like Thanksgiving Day, Black Friday, Cyber Monday and Christmas. Thus, investing in consumer discretionary stocks would be ideal during this time.
Bowlero Corp. is an owner and operator of bowling centers as well as owner of the Professional Bowlers Association. BOWK, formerly known as Isos Acquisition Corporation, is based in Richmond, VA.
Bowlero’s expected earnings growth rate for the current year is 30.4%. The Zacks Consensus Estimate for current-year earnings has improved 35.2% over the past 60 days. BOWL presently carries a Zacks Rank #2.
Hilton Grand Vacations Inc. is engaged in the hospitality business. HGV markets and operates vacation ownership resorts. Hilton Grand Vacationsalso manages and serves club membership programs, which include Hilton Grand Vacations Club and The Hilton Club.
Hilton Grand Vacations’ expected earnings growth rate for the current year is 60.9%. The Zacks Consensus Estimate for current-year earnings has improved 19.3% over the past 90 days. HGV currently sports a Zacks Rank #1.
OneSpaWorld Holdings Limited is a provider and innovator in the fields of wellness, beauty, rejuvenation and transformation on cruise ships and on land. OSW’s service includes traditional and alternative massage, body and skincare treatment options, ayurvedic treatments, comprehensive hair and nail services, fitness, acupuncture, herbal medicine, pain management and medi-spa.
OneSpaWorld Holdings Limited expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 38.9% over the past 90 days. HGV currently sports a Zacks Rank #1.
Wyndham Hotels & Resorts, Inc. operates a hotel and resort chain. WH functions primarily in Canada, Mexico, Colombia, Ecuador, Turkey, Germany, the UK, the Caribbean and Margarita Island in Venezuela. Wyndham Hotels and Resorts is headquartered in New Jersey.
Wyndham Hotels & Resorts’ expected earnings growth rate for the current year is 22.5%. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the past 60 days. WH currently has a Zacks Rank #2.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Shutterstock
4 Stocks to Buy on a Solid Rebound in Consumer Sentiment
Soaring inflation has been crippling trade and people have been compelled to spend cautiously. However, prices have been cooling over the past couple of months, which has given a boost to consumer sentiment lately. The University of Michigan's preliminary December reading showed that consumer sentiment improved in January for the second consecutive month.
A number of factors have been playing key roles in the improvement of consumer sentiment. People are regaining their lost confidence thanks to increases in earnings, a decline in the cost of consumer items, and the Fed finally going slow on its pace of interest rate hikes.
Given this scenario, consumer sentiment is finally increasing, helping stocks like Bowlero Corp. (BOWL - Free Report) , Hilton Grand Vacations Inc. (HGV - Free Report) , OneSpaWorld Holdings Limited (OSW - Free Report) and Wyndham Hotels & Resorts, Inc. (WH - Free Report) .
Consumer Sentiment Rebounding
The University of Michigan's preliminary December consumer sentiment index reading rose 64.6 in January from December’s reading of 59.7 to hit an eight-month high. January’s reading was also higher than the consensus estimate of 60.5. Also, the assessment for both the future and current conditions improved in January.
The reading for one-year inflation expectations also dropped to 4% in January from 4.4% in the previous month. This is the lowest level in 16 months, and the fourth consecutive month of rise, which once again proves that people are gradually regaining confidence and still believe in a fast economic recovery.
The current economic conditions index also climbed to 68.6 in January from 59.4 in the previous month, reflecting a significant improvement in consumers' assessments of the state of the economy.
Consumer sentiment has recently been improving owing to several factors. Consumer sentiment was low over the past several months as rising prices and the Fed's aggressive rate hike policy had stoked concerns about an impending economic recession.
These concerns have been gradually fading as prices have been cooling lately. Although prices are still high, wholesale inflation in December fell for the seventh consecutive month, suggesting that inflationary pressures have finally begun to ease.
The Labor Department said last week that the consumer price index (CPI) in December fell to 6.5% from 7.1% in November 2022 on a year-over-year basis. This was the smallest increase since October 2021. On a month-over-month basis, inflation dropped 0.1% in December after rising 0.1% in November.
The core CPI, which excludes the volatile energy and food prices, rose 5.7% year over year in December compared to 6% in November. Month over month, core CIP increased 0.3% in December after rising 0.2% in the previous month.
The Fed finally had earlier indicated that it could go slow on its aggressive rate hike policy. In December, the Fed increased interest rates by 50 basis points after hiking rates by 75 basis points on four consecutive occasions.
A lower interest hike is an indication that inflation is finally easing. Also, wages are still on the rise, giving people the power to purchase. This saw record retail sales during the holiday period like Thanksgiving Day, Black Friday, Cyber Monday and Christmas. Thus, investing in consumer discretionary stocks would be ideal during this time.
Our Choices
Given this scenario, it would be wise to invest in these four stocks. Each of the stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Bowlero Corp. is an owner and operator of bowling centers as well as owner of the Professional Bowlers Association. BOWK, formerly known as Isos Acquisition Corporation, is based in Richmond, VA.
Bowlero’s expected earnings growth rate for the current year is 30.4%. The Zacks Consensus Estimate for current-year earnings has improved 35.2% over the past 60 days. BOWL presently carries a Zacks Rank #2.
Hilton Grand Vacations Inc. is engaged in the hospitality business. HGV markets and operates vacation ownership resorts. Hilton Grand Vacationsalso manages and serves club membership programs, which include Hilton Grand Vacations Club and The Hilton Club.
Hilton Grand Vacations’ expected earnings growth rate for the current year is 60.9%. The Zacks Consensus Estimate for current-year earnings has improved 19.3% over the past 90 days. HGV currently sports a Zacks Rank #1.
OneSpaWorld Holdings Limited is a provider and innovator in the fields of wellness, beauty, rejuvenation and transformation on cruise ships and on land. OSW’s service includes traditional and alternative massage, body and skincare treatment options, ayurvedic treatments, comprehensive hair and nail services, fitness, acupuncture, herbal medicine, pain management and medi-spa.
OneSpaWorld Holdings Limited expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 38.9% over the past 90 days. HGV currently sports a Zacks Rank #1.
Wyndham Hotels & Resorts, Inc. operates a hotel and resort chain. WH functions primarily in Canada, Mexico, Colombia, Ecuador, Turkey, Germany, the UK, the Caribbean and Margarita Island in Venezuela. Wyndham Hotels and Resorts is headquartered in New Jersey.
Wyndham Hotels & Resorts’ expected earnings growth rate for the current year is 22.5%. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the past 60 days. WH currently has a Zacks Rank #2.