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5 Must-Buy Stocks as Consumer Sentiment Soars to 3-Year High
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Consumers are a lot more optimistic about the economy’s future and believe that inflation will continue to cool. The positive outlook comes as the Federal Reserve gears up for the first of multiple rate cuts planned this year.
The University of Michigan’s Consumer Sentiment Index rose to a final reading of 79.4 in March, surpassing estimates of 76.5 and the highest reading since July 2021.
The sub-index for both the current economic condition and consumer improved from the February final readings. The survey's measurement of one-year inflation expectations fell to 2.9% in March from 3% a month earlier.
The five-year inflation expectations also fell to 2.8% in March from 2.9% in February.
The Federal Reserve increased interest rates by 525 points since March 2022 to take its benchmark policy rate in the current range of 5.25-5.5%. Inflation has since declined sharply and the Federal Reserve at the end of 2023 signaled at ending its monetary tightening campaign.
Fed Chairman Jerome Powell said at the end of the FOMC policy meeting that the central bank is planning at least three interest rate cuts by the end of this year.
The current optimism surrounding rate cuts has lifted consumers’ sentiments as they believe that the worst is over and the economy is making a solid rebound. Rate cuts bode well for the economy as lower interest rates will further help consumers to spend more freely.
Our Choices
We have narrowed our search to five consumer discretionary stocks that have strong potential for 2024. These stocks have seen positive earnings estimate revisions in the last 60 days. Each of our picks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
American Public Education, Inc. (APEI - Free Report) is an online and campus-based postsecondary education provider. APEI serves approximately 107,000 students through three subsidiary institutions: American Public University System, Rasmussen University segment and Hondros College of Nursing segment.
American Public Education’s expected earnings growth rate for the current year is 121.2%. The Zacks Consensus Estimate for current-year earnings has improved 12.7% over the past 60 days. APEI currently has a Zacks Rank #2.
Hyatt Hotels Corporation (H - Free Report) is a leading global hospitality company engaged in the development, ownership, operation, management, franchising and licensing of a portfolio of properties, including hotels, resorts and residential and vacation ownership properties around the world. As of Mar 31, 2022, H’s portfolio included more than 1,150 properties in 71 countries across six continents.
Hyatt Hotels Corporation’s expected earnings growth rate for the current year is 27%. The Zacks Consensus Estimate for current-year earnings has improved 15.2% over the past 60 days. H presently carries a Zacks Rank #2.
PVH Corp. (PVH - Free Report) specializes in designing and marketing branded dress shirts, neckwear, sportswear, jeanswear, intimate apparel, swim products, footwear, handbags and related products. PVH’s brands are sold globally at various price points and in channels of distribution.
PVH Corp’s expected earnings growth rate for the current year is 11.9%. The Zacks Consensus Estimate for current-year earnings has improved 2.2% over the past 60 days. PVH presently carries 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 a 50% investment in a joint venture with TUI AG, which operates the brand TUI Cruises. Royal Caribbean Cruises' brands primarily serve the contemporary, premium and deluxe segments of the cruise vacation industry, which also includes the budget and luxury segments.
Royal Caribbean Cruises' expected earnings growth rate for the current year is 47.93%. The Zacks Consensus Estimate for current-year earnings has improved 5.8% over the past 60 days. RCL currently sports a Zacks Rank #1.
Interface, Inc. (TILE - Free Report) is the world's largest manufacturer of modular carpet, which it markets under the Interface and FLOR brands. TILE is committed to the goal of sustainability and doing business in ways that minimize the impact on the environment while enhancing shareholder value.
Interface’sexpected earnings growth rate for the current year is 2%. The Zacks Consensus Estimate for current-year earnings has improved 32.5% over the past 60 days. TILE presently sports a Zacks Rank #1.
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5 Must-Buy Stocks as Consumer Sentiment Soars to 3-Year High
Consumers are a lot more optimistic about the economy’s future and believe that inflation will continue to cool. The positive outlook comes as the Federal Reserve gears up for the first of multiple rate cuts planned this year.
The University of Michigan’s Consumer Sentiment Index rose to a final reading of 79.4 in March, surpassing estimates of 76.5 and the highest reading since July 2021.
The sub-index for both the current economic condition and consumer improved from the February final readings. The survey's measurement of one-year inflation expectations fell to 2.9% in March from 3% a month earlier.
The five-year inflation expectations also fell to 2.8% in March from 2.9% in February.
The Federal Reserve increased interest rates by 525 points since March 2022 to take its benchmark policy rate in the current range of 5.25-5.5%. Inflation has since declined sharply and the Federal Reserve at the end of 2023 signaled at ending its monetary tightening campaign.
Fed Chairman Jerome Powell said at the end of the FOMC policy meeting that the central bank is planning at least three interest rate cuts by the end of this year.
The current optimism surrounding rate cuts has lifted consumers’ sentiments as they believe that the worst is over and the economy is making a solid rebound. Rate cuts bode well for the economy as lower interest rates will further help consumers to spend more freely.
Our Choices
We have narrowed our search to five consumer discretionary stocks that have strong potential for 2024. These stocks have seen positive earnings estimate revisions in the last 60 days. Each of our picks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
American Public Education, Inc. (APEI - Free Report) is an online and campus-based postsecondary education provider. APEI serves approximately 107,000 students through three subsidiary institutions: American Public University System, Rasmussen University segment and Hondros College of Nursing segment.
American Public Education’s expected earnings growth rate for the current year is 121.2%. The Zacks Consensus Estimate for current-year earnings has improved 12.7% over the past 60 days. APEI currently has a Zacks Rank #2.
Hyatt Hotels Corporation (H - Free Report) is a leading global hospitality company engaged in the development, ownership, operation, management, franchising and licensing of a portfolio of properties, including hotels, resorts and residential and vacation ownership properties around the world. As of Mar 31, 2022, H’s portfolio included more than 1,150 properties in 71 countries across six continents.
Hyatt Hotels Corporation’s expected earnings growth rate for the current year is 27%. The Zacks Consensus Estimate for current-year earnings has improved 15.2% over the past 60 days. H presently carries a Zacks Rank #2.
PVH Corp. (PVH - Free Report) specializes in designing and marketing branded dress shirts, neckwear, sportswear, jeanswear, intimate apparel, swim products, footwear, handbags and related products. PVH’s brands are sold globally at various price points and in channels of distribution.
PVH Corp’s expected earnings growth rate for the current year is 11.9%. The Zacks Consensus Estimate for current-year earnings has improved 2.2% over the past 60 days. PVH presently carries 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 a 50% investment in a joint venture with TUI AG, which operates the brand TUI Cruises. Royal Caribbean Cruises' brands primarily serve the contemporary, premium and deluxe segments of the cruise vacation industry, which also includes the budget and luxury segments.
Royal Caribbean Cruises' expected earnings growth rate for the current year is 47.93%. The Zacks Consensus Estimate for current-year earnings has improved 5.8% over the past 60 days. RCL currently sports a Zacks Rank #1.
Interface, Inc. (TILE - Free Report) is the world's largest manufacturer of modular carpet, which it markets under the Interface and FLOR brands. TILE is committed to the goal of sustainability and doing business in ways that minimize the impact on the environment while enhancing shareholder value.
Interface’sexpected earnings growth rate for the current year is 2%. The Zacks Consensus Estimate for current-year earnings has improved 32.5% over the past 60 days. TILE presently sports a Zacks Rank #1.