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5 Stocks to Buy as Consumer Confidence Makes Solid Rebound
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Americans are a lot more confident now with the Fed finally halting its interest rate hikes on continued signs of easing inflation in June. Although many still fear that the economy might slip into a recession, a large number of people believe that such a situation could be avoided.
This has led to consumer confidence climbing up substantially in June. The Conference Board said on Jun 27 that consumer confidence rose to 109.7 in June from May’s revised reading of 102.5 and surpassed analysts’ expectations of a reading of 104. June’s reading is also the highest since January 2022.
Also, the Conference Board’s survey showed that consumers’ expectations for 12-month inflation fell to 6% in June from 6.1% in the prior month. This is the lowest reading since the end of 2020.
The Expectations Index, which shows consumers’ outlook for business, income and labor market conditions over the upcoming six months, also rose to 79.3 from May’s reading of 71.5, its highest level in more than a year.
More importantly, the Present Situation Index, which indicates consumers’ assessment of the present business and labor market conditions, jumped to 155.3 in June from 148.9 in May.
The survey also showed that an impressive 30% of the respondents believe that the financial situation of their families will be “better” over the next six months against 14% who fear it will be “worse.”
Understandably, the present economic scenario is giving people the much-required confidence. The U.S. labor market is still resilient, which is boosting household confidence. The economy added 339,000 jobs in May, indicating that the labor market is still going strong. At the same time, the jobless rate is below the 4% level, which means people are feeling secure about their jobs.
Both consumer price and producer price inflation declined in May, indicating that inflation has slowed. This prompted the Fed to keep interest rates unaltered.
Given this situation, it would be ideal to invest in consumer discretionary stocks.
Our Choices
Therefore, from an investment perspective, we have identified four stocks from this sector that are likely to gain on the rebound in consumer confidence. Each of these 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.
Marriott International, Inc. (MAR - Free Report) is a leading worldwide hospitality company focused on lodging management and franchising. During the first quarter of 2023, MAR added 79 new properties (11,015 rooms) to its worldwide lodging portfolio. At the end of first-quarter 2023, Marriott International’s development pipeline totaled 3,060 hotels, with approximately 502,000 rooms. Nearly 200,000 rooms were under construction.
Marriott International’s expected earnings growth rate for the current year is 25.7%. The Zacks Consensus Estimate for current-year earnings has improved 8.2% over the past 60 days. MAR has a Zacks Rank #2.
Royal Caribbean Cruises Ltd. (RCL - Free Report) owns and operates three global brands — Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises. Additionally, RCL has 50% investment in a joint venture with TUI AG, which operates the brand TUI Cruises. Royal Caribbean Cruises’ cruise brands primarily serve the contemporary, premium and deluxe segments of the cruise vacation industry, which includes the budget and luxury segments.
Royal Caribbean Cruises’ expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 44.8% over the past 60 days. RCL currently sports a Zacks Rank #1.
Hilton Grand Vacations Inc. (HGV - Free Report) 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 12.9%. The Zacks Consensus Estimate for current-year earnings has improved 4.5% over the past 60 days. HGV currently sports a Zacks Rank #1.
Lifetime Brands, Inc. (LCUT - Free Report) is a leading designer, marketer and distributor of kitchenware, cutlery & cutting boards, bakeware & cookware, pantry ware & spices, tabletop and bath accessories. LCUT markets its products under various trade names, including Farberware, KitchenAid, Pfaltzgraff, Cuisinart, Hoffritz, Sabatier, Nautica, DBK-Daniel Boulud Kitchen, Joseph Abboud Environments, Roshco, Baker's Advantage, Kamenstein, CasaModa, Kathy Ireland, and USE.
Lifetime Brands’ expected earnings growth rate for the current year is 93.6%. The Zacks Consensus Estimate for current-year earnings has improved 9.1% over the past 60 days. LCUT presently carries a Zacks Rank #1.
Cinemark Holdings, Inc. (CNK - Free Report) is a leader in the motion picture exhibition industry. CNK operates 408 theatres and 4,657 screens in 38 states in the United States and internationally in 12 countries, mainly in Mexico, South and Central America.
Cinemark Holdings’ expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the past 60 days. CNK currently has a Zacks Rank #2.
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5 Stocks to Buy as Consumer Confidence Makes Solid Rebound
Americans are a lot more confident now with the Fed finally halting its interest rate hikes on continued signs of easing inflation in June. Although many still fear that the economy might slip into a recession, a large number of people believe that such a situation could be avoided.
This has led to consumer confidence climbing up substantially in June. The Conference Board said on Jun 27 that consumer confidence rose to 109.7 in June from May’s revised reading of 102.5 and surpassed analysts’ expectations of a reading of 104. June’s reading is also the highest since January 2022.
Also, the Conference Board’s survey showed that consumers’ expectations for 12-month inflation fell to 6% in June from 6.1% in the prior month. This is the lowest reading since the end of 2020.
The Expectations Index, which shows consumers’ outlook for business, income and labor market conditions over the upcoming six months, also rose to 79.3 from May’s reading of 71.5, its highest level in more than a year.
More importantly, the Present Situation Index, which indicates consumers’ assessment of the present business and labor market conditions, jumped to 155.3 in June from 148.9 in May.
The survey also showed that an impressive 30% of the respondents believe that the financial situation of their families will be “better” over the next six months against 14% who fear it will be “worse.”
Understandably, the present economic scenario is giving people the much-required confidence. The U.S. labor market is still resilient, which is boosting household confidence. The economy added 339,000 jobs in May, indicating that the labor market is still going strong. At the same time, the jobless rate is below the 4% level, which means people are feeling secure about their jobs.
Both consumer price and producer price inflation declined in May, indicating that inflation has slowed. This prompted the Fed to keep interest rates unaltered.
Given this situation, it would be ideal to invest in consumer discretionary stocks.
Our Choices
Therefore, from an investment perspective, we have identified four stocks from this sector that are likely to gain on the rebound in consumer confidence. Each of these 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.
Marriott International, Inc. (MAR - Free Report) is a leading worldwide hospitality company focused on lodging management and franchising. During the first quarter of 2023, MAR added 79 new properties (11,015 rooms) to its worldwide lodging portfolio. At the end of first-quarter 2023, Marriott International’s development pipeline totaled 3,060 hotels, with approximately 502,000 rooms. Nearly 200,000 rooms were under construction.
Marriott International’s expected earnings growth rate for the current year is 25.7%. The Zacks Consensus Estimate for current-year earnings has improved 8.2% over the past 60 days. MAR has a Zacks Rank #2.
Royal Caribbean Cruises Ltd. (RCL - Free Report) owns and operates three global brands — Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises. Additionally, RCL has 50% investment in a joint venture with TUI AG, which operates the brand TUI Cruises. Royal Caribbean Cruises’ cruise brands primarily serve the contemporary, premium and deluxe segments of the cruise vacation industry, which includes the budget and luxury segments.
Royal Caribbean Cruises’ expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 44.8% over the past 60 days. RCL currently sports a Zacks Rank #1.
Hilton Grand Vacations Inc. (HGV - Free Report) 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 12.9%. The Zacks Consensus Estimate for current-year earnings has improved 4.5% over the past 60 days. HGV currently sports a Zacks Rank #1.
Lifetime Brands, Inc. (LCUT - Free Report) is a leading designer, marketer and distributor of kitchenware, cutlery & cutting boards, bakeware & cookware, pantry ware & spices, tabletop and bath accessories. LCUT markets its products under various trade names, including Farberware, KitchenAid, Pfaltzgraff, Cuisinart, Hoffritz, Sabatier, Nautica, DBK-Daniel Boulud Kitchen, Joseph Abboud Environments, Roshco, Baker's Advantage, Kamenstein, CasaModa, Kathy Ireland, and USE.
Lifetime Brands’ expected earnings growth rate for the current year is 93.6%. The Zacks Consensus Estimate for current-year earnings has improved 9.1% over the past 60 days. LCUT presently carries a Zacks Rank #1.
Cinemark Holdings, Inc. (CNK - Free Report) is a leader in the motion picture exhibition industry. CNK operates 408 theatres and 4,657 screens in 38 states in the United States and internationally in 12 countries, mainly in Mexico, South and Central America.
Cinemark Holdings’ expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the past 60 days. CNK currently has a Zacks Rank #2.