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.
Buy These Top-Rated Stocks for China's Strong GDP Growth
Read MoreHide Full Article
China’s first quarter GDP numbers were much anticipated after reopening its economy and ending its Zero Covid-19 policy last December. Impressively, China’s GDP grew by 4.5% during the first quarter topping expectations of 4% and rising 2.2% year over year.
Furthermore, the International Monetary Fund (IMF) and the World Bank rate China as the world’s largest economy based on purchasing power. As shown in the nearby chart, China’s total GDP in currency is now at $17.73 trillion and just behind the U.S. at $23.32 trillion.
Image Source: The World Bank
GDP growth is oftentimes indicative of a strong consumer and this makes it more intriguing to invest in Chinese companies at the moment. With that being said, there are quite a few American companies that derive revenue from China and offer an alternative option outside of buying Chinese companies that have American Depository Receipts (ADRs) on U.S. stock exchanges.
It is important to note that the market is forward-looking so many stocks offering valuable exposure to China have already soared in recent months but there is still opportunity among the Zacks Consumer Discretionary sector in particular.
To that point, China’s retail sales of consumer goods increased 5.8% year over year according to the National Bureau of Statistics. Here are three top-rated Zacks Consumer Discretionary stocks that should have more upside and offer diversification to China’s economy.
Among ADRs, Trip.com's stock stands out right now and currently boasts a Zacks Rank #1 (Strong Buy) with its Leisure and Recreation Services Industry in the top 29% of over 250 Zacks industries.
As a one-stop travel service company based in Shanghai, Trip.com is expected to be a beneficiary of the warmer summer months ahead as we approach peak travel season. Travel is expected to be higher in 2023 from lingering pent-up demand following the pandemic. This will certainly be the case for destinations in China after reopening its borders.
Earnings estimate revisions have noticeably trended higher for Trip.com over the last 60 days. Over the last two months, fiscal 2023 and FY24 EPS estimates have climbed 12% and 11% respectively.
Image Source: Zacks Investment Research
Even better, Trip.com earnings are now forecasted to skyrocket 275% this year at $1.09 per share compared to EPS of $0.29 in 2022. Fiscal 2024 earnings are expected to soar another 67% to $1.83 per share.
Outside of investing in Chinese companies directly through ADRs, Wynn Resorts is a prime example of an American company that should benefit from the growth of China’s economy.
Wynn stock sports a Zacks Rank #2 (Buy) with the Las Vegas-based company operating its casino resorts in sin city, Everett Massachusetts, and Macau China.
In fact, more than 70% of Wynn’s revenue comes from the three casinos it operates in Macau which is considered China’s version of Las Vegas. Indicative of the boost the reopening of the Chinese economy will add to Wynn’s post-pandemic recovery and future growth is that sales are anticipated to climb 45% this year and jump another 17% in FY24 to $6.43 billion.
Image Source: Zacks Investment Research
China’s growth is even more crucial to Wynn’s bottom line. To that note, earnings are expected to rebound and climb swing from a loss of -$4.47 per share last year to EPS of $1.05 in 2023. More intriguing, fiscal 2024 earnings are forecasted to leap another 385% at $5.10 a share. Largely attributed to Wynn’s buy rating is that earnings estimate revisions have soared and continue to go up.
With an iconic global brand, Nike’s stock will get an added boost from China’s reopening and lands a Zacks Rank #2 (Buy). Notably, despite Nike’s Greater China segment sales dipping -9% in 2022 at $7.54 billion this still accounted for 16% of its total sales.
Even better, this still represented 47% growth over the last five years with 2018 Greater China sales at $5.13 billion. As the Chinese economy kicks back in gear, the footwear and apparel giant will certainly look to continue its expansion in the People’s Republic.
Image Source: Zacks Investment Research
This will certainly add to Nike’s steady growth and earnings power. Nike’s earnings are forecasted to drop -13% this year but rebound and pop 23% in FY24 at $4.00 per share. Plus, earnings estimates have continued to tick higher for FY23 and FY24 over the last 30 days.
Nike stock is more appealing considering the company has put together a string of nice earnings beats despite lowered contributions and growth from its Greater China segment. Suprisingly, Nike crushed its fiscal third-quarter earnings expectations by 52% in March with EPS at $0.79 compared to estimates of $0.27 a share.
Image Source: Zacks Investment Research
Takeaway
These Zacks Consumer Discretionary stocks offer unique diversification to China’s huge economy. Furthermore, China’s strong first-quarter GDP numbers are a positive affirmation that these companies are growing as well. The rising earnings estimate revisions appear to reaffirm this and could continue to trend higher leading to nice upside in Trip.com, Wynn Resorts, and Nike stock.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Buy These Top-Rated Stocks for China's Strong GDP Growth
China’s first quarter GDP numbers were much anticipated after reopening its economy and ending its Zero Covid-19 policy last December. Impressively, China’s GDP grew by 4.5% during the first quarter topping expectations of 4% and rising 2.2% year over year.
Furthermore, the International Monetary Fund (IMF) and the World Bank rate China as the world’s largest economy based on purchasing power. As shown in the nearby chart, China’s total GDP in currency is now at $17.73 trillion and just behind the U.S. at $23.32 trillion.
Image Source: The World Bank
GDP growth is oftentimes indicative of a strong consumer and this makes it more intriguing to invest in Chinese companies at the moment. With that being said, there are quite a few American companies that derive revenue from China and offer an alternative option outside of buying Chinese companies that have American Depository Receipts (ADRs) on U.S. stock exchanges.
It is important to note that the market is forward-looking so many stocks offering valuable exposure to China have already soared in recent months but there is still opportunity among the Zacks Consumer Discretionary sector in particular.
To that point, China’s retail sales of consumer goods increased 5.8% year over year according to the National Bureau of Statistics. Here are three top-rated Zacks Consumer Discretionary stocks that should have more upside and offer diversification to China’s economy.
Trip.com (TCOM - Free Report) )
Among ADRs, Trip.com's stock stands out right now and currently boasts a Zacks Rank #1 (Strong Buy) with its Leisure and Recreation Services Industry in the top 29% of over 250 Zacks industries.
As a one-stop travel service company based in Shanghai, Trip.com is expected to be a beneficiary of the warmer summer months ahead as we approach peak travel season. Travel is expected to be higher in 2023 from lingering pent-up demand following the pandemic. This will certainly be the case for destinations in China after reopening its borders.
Earnings estimate revisions have noticeably trended higher for Trip.com over the last 60 days. Over the last two months, fiscal 2023 and FY24 EPS estimates have climbed 12% and 11% respectively.
Image Source: Zacks Investment Research
Even better, Trip.com earnings are now forecasted to skyrocket 275% this year at $1.09 per share compared to EPS of $0.29 in 2022. Fiscal 2024 earnings are expected to soar another 67% to $1.83 per share.
Image Source: Zacks Investment Research
Wynn Resorts (WYNN - Free Report) )
Outside of investing in Chinese companies directly through ADRs, Wynn Resorts is a prime example of an American company that should benefit from the growth of China’s economy.
Wynn stock sports a Zacks Rank #2 (Buy) with the Las Vegas-based company operating its casino resorts in sin city, Everett Massachusetts, and Macau China.
In fact, more than 70% of Wynn’s revenue comes from the three casinos it operates in Macau which is considered China’s version of Las Vegas. Indicative of the boost the reopening of the Chinese economy will add to Wynn’s post-pandemic recovery and future growth is that sales are anticipated to climb 45% this year and jump another 17% in FY24 to $6.43 billion.
Image Source: Zacks Investment Research
China’s growth is even more crucial to Wynn’s bottom line. To that note, earnings are expected to rebound and climb swing from a loss of -$4.47 per share last year to EPS of $1.05 in 2023. More intriguing, fiscal 2024 earnings are forecasted to leap another 385% at $5.10 a share. Largely attributed to Wynn’s buy rating is that earnings estimate revisions have soared and continue to go up.
Image Source: Zacks Investment Research
Nike (NKE - Free Report) )
With an iconic global brand, Nike’s stock will get an added boost from China’s reopening and lands a Zacks Rank #2 (Buy). Notably, despite Nike’s Greater China segment sales dipping -9% in 2022 at $7.54 billion this still accounted for 16% of its total sales.
Even better, this still represented 47% growth over the last five years with 2018 Greater China sales at $5.13 billion. As the Chinese economy kicks back in gear, the footwear and apparel giant will certainly look to continue its expansion in the People’s Republic.
Image Source: Zacks Investment Research
This will certainly add to Nike’s steady growth and earnings power. Nike’s earnings are forecasted to drop -13% this year but rebound and pop 23% in FY24 at $4.00 per share. Plus, earnings estimates have continued to tick higher for FY23 and FY24 over the last 30 days.
Nike stock is more appealing considering the company has put together a string of nice earnings beats despite lowered contributions and growth from its Greater China segment. Suprisingly, Nike crushed its fiscal third-quarter earnings expectations by 52% in March with EPS at $0.79 compared to estimates of $0.27 a share.
Image Source: Zacks Investment Research
Takeaway
These Zacks Consumer Discretionary stocks offer unique diversification to China’s huge economy. Furthermore, China’s strong first-quarter GDP numbers are a positive affirmation that these companies are growing as well. The rising earnings estimate revisions appear to reaffirm this and could continue to trend higher leading to nice upside in Trip.com, Wynn Resorts, and Nike stock.