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5 Stocks to Buy on a Solid Jump in Consumer Spending
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U.S. economic growth slowed in the first quarter. The Commerce Department reported that U.S. gross domestic product (GDP) grew a meager 1.6%, a lot lower than the 3.4% recorded in the final quarter of 2023.
The report mentioned that consumer spending somewhat moderated from January through March, which slowed down the economy. However, the report also said that consumer spending remains solid, and has been driving the economy.
Consumer spending, which accounts for over two-thirds of U.S. economic activity, increased 2.5% in the first quarter. Although it was lower than the 3.3% rise in the final quarter of 2023, consumer spending remains resilient.
In March, consumer spending increased a solid 0.8%, as consumers spent on both goods and services. After adjustment for inflation, consumer spending climbed 0.5%, after rising by the same margin in February.
Consumers are spending lavishly despite price pressures. Higher personal income is giving more purchasing power to consumers. The Commerce Department reported that personal income rose 0.5% in March, after increasing 0.3% in February.
Inflation has resumed its climb this year after declining sharply in 2023. However, the Federal Reserve still plans at least three interest rate cuts by the end of this year. Lower borrowing costs will further ease price pressures, which will allow people to spend more freely.
Our Choices
We have narrowed our search to five consumer discretionary stocks such as The Walt Disney Company (DIS - Free Report) , Churchill Downs Incorporated (CHDN - Free Report) , H&R Block, Inc. (HRB - Free Report) , Netflix, Inc. (NFLX - Free Report) and American Public Education, Inc. (APEI - Free Report) that have strong potential for 2024. These stocks have seen positive earnings estimate revisions in the last 60 days. Each of the stocks has a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Walt Disney Company has assets that span movies, television shows and theme parks. DIS’ revenues were $88.89 billion in fiscal 2023.
The Walt Disney Company’s expected earnings growth rate for the current year is 23.9%. The Zacks Consensus Estimate for current-year earnings has improved 1.1% over the past 60 days. DIS presently has a Zacks Rank #2.
Churchill Downs Incorporated the world's most legendary racetrack, has conducted Thoroughbred racing and presented America's greatest race, the Kentucky Derby. CHDN owes much to its horse racing heritage and is expanding on that tradition while evolving its business mix, management team and growth strategies to navigate any challenges.
Churchill Downs’ expected earnings growth rate for the current year is 12.2%. The Zacks Consensus Estimate for current-year earnings has improved 1.3% over the past 60 days. CHDN currently carries a Zacks Rank #2.
H&R Block, Inc. is a leading provider of tax preparation services. HRB provides assisted income tax return preparation, do-it-yourself tax solutions and other products and services associated with income tax return preparation in the United States, Canada and Australia.
H&R Block’sexpected earnings growth rate for the current year is 11.3%. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the past 60 days. HRB currently carries a Zacks Rank #2.
Netflix, Inc. is considered a pioneer in the streaming space. NFLX has been spending aggressively on building its portfolio of original shows. This is helping Netflix sustain its leading position despite the launch of new services like Disney+ and Apple TV+, as well as existing services like Amazon Prime Video.
Netflix’s expected earnings growth rate for the current year is 50.7%. The Zacks Consensus Estimate for the current-year earnings has improved 6.3% over the past 60 days. NFLX currently carries a Zacks Rank #2.
American Public Education, Inc. 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.
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5 Stocks to Buy on a Solid Jump in Consumer Spending
U.S. economic growth slowed in the first quarter. The Commerce Department reported that U.S. gross domestic product (GDP) grew a meager 1.6%, a lot lower than the 3.4% recorded in the final quarter of 2023.
The report mentioned that consumer spending somewhat moderated from January through March, which slowed down the economy. However, the report also said that consumer spending remains solid, and has been driving the economy.
Consumer spending, which accounts for over two-thirds of U.S. economic activity, increased 2.5% in the first quarter. Although it was lower than the 3.3% rise in the final quarter of 2023, consumer spending remains resilient.
In March, consumer spending increased a solid 0.8%, as consumers spent on both goods and services. After adjustment for inflation, consumer spending climbed 0.5%, after rising by the same margin in February.
Consumers are spending lavishly despite price pressures. Higher personal income is giving more purchasing power to consumers. The Commerce Department reported that personal income rose 0.5% in March, after increasing 0.3% in February.
Inflation has resumed its climb this year after declining sharply in 2023. However, the Federal Reserve still plans at least three interest rate cuts by the end of this year. Lower borrowing costs will further ease price pressures, which will allow people to spend more freely.
Our Choices
We have narrowed our search to five consumer discretionary stocks such as The Walt Disney Company (DIS - Free Report) , Churchill Downs Incorporated (CHDN - Free Report) , H&R Block, Inc. (HRB - Free Report) , Netflix, Inc. (NFLX - Free Report) and American Public Education, Inc. (APEI - Free Report) that have strong potential for 2024. These stocks have seen positive earnings estimate revisions in the last 60 days. Each of the stocks has a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Walt Disney Company has assets that span movies, television shows and theme parks. DIS’ revenues were $88.89 billion in fiscal 2023.
The Walt Disney Company’s expected earnings growth rate for the current year is 23.9%. The Zacks Consensus Estimate for current-year earnings has improved 1.1% over the past 60 days. DIS presently has a Zacks Rank #2.
Churchill Downs Incorporated the world's most legendary racetrack, has conducted Thoroughbred racing and presented America's greatest race, the Kentucky Derby. CHDN owes much to its horse racing heritage and is expanding on that tradition while evolving its business mix, management team and growth strategies to navigate any challenges.
Churchill Downs’ expected earnings growth rate for the current year is 12.2%. The Zacks Consensus Estimate for current-year earnings has improved 1.3% over the past 60 days. CHDN currently carries a Zacks Rank #2.
H&R Block, Inc. is a leading provider of tax preparation services. HRB provides assisted income tax return preparation, do-it-yourself tax solutions and other products and services associated with income tax return preparation in the United States, Canada and Australia.
H&R Block’sexpected earnings growth rate for the current year is 11.3%. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the past 60 days. HRB currently carries a Zacks Rank #2.
Netflix, Inc. is considered a pioneer in the streaming space. NFLX has been spending aggressively on building its portfolio of original shows. This is helping Netflix sustain its leading position despite the launch of new services like Disney+ and Apple TV+, as well as existing services like Amazon Prime Video.
Netflix’s expected earnings growth rate for the current year is 50.7%. The Zacks Consensus Estimate for the current-year earnings has improved 6.3% over the past 60 days. NFLX currently carries a Zacks Rank #2.
American Public Education, Inc. 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.