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6 Consumer Discretionary Stocks to Buy for Black Friday Week

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When it comes to retail sales, Black Friday is probably only second to the months of November and December. Online shopping may have robbed some of its shine, but experts still think that the Black Friday period continues to be a crucial time for conventional retailers. This is borne out by fresh survey data from the National Retail Federation (NRF).

Consumer discretionary stocks are also likely to post gains on the financial markets this week. Historical data shows that the S&P 500’s consumer discretionary sector has posted strong gains over the Thanksgiving trading week. This is why it makes sense to pick up consumer discretionary stocks, which are part of the S&P 500, during this period.

Strong Performers During Thanksgiving Trading Week

According to CNBC analysis using Kensho Financial Analytics Software, the S&P 500’s consumer discretionary sector has increased 1% on average over the last 30 years during the Thanksgiving trading week. During this period, which ends with Black Friday, the sector has also traded positively 71% of the time.

 

This is the best performance of any of the benchmark’s sectors, but for communications, which has gained 1.1% over this period. Further, it is nearly twice the average return for the S&P 500 as a whole, which has gained more than 0.5% on average during the Thanksgiving trading week.

Kensho data shows that the best performing S&P 500 retail stocks during this period are Amazon.com, Inc. (AMZN - Free Report) and Best Buy Co., Inc. (BBY - Free Report) . Shares of these stocks have gained respectively 4% and 3.7% on average, during this week.

More Than 164 Million to Shop This Weekend

According to the annual survey conducted by Prosper Insights & Analytics for the NRF, 164 million Americans will scramble to grab offers over the Thanksgiving weekend. Per the NRF’s Ana Smith, Black Friday is the second-biggest shopping day of the holiday season. The day will see 116 million Americans hunting for the best offers.

Per the survey, 21% of those looking to shop over this holiday weekend will shop on Thanksgiving Day. While this works out to 34 million, Black Friday will be the busiest day of this period, with 71% or 116 million going out to grab the best deals. Nearly 46% or 75 million Americans will make the best of online bargains on Cyber Monday, which brings this period to a close.

Our Choices

As is historically the case, the Thanksgiving week is likely to be a big period for traditional retailers. Further, the Black Friday trading week will be a strong period for consumer discretionary stocks, per CNBC. The sector has gained 1% on average during this period over the last 30 years.

This is why it makes sense to add consumer discretionary stocks from the S&P 500 to your portfolio during this period. We have narrowed our search to the following stocks based on a Zacks Rank #2 (Buy) and other relevant metrics. You can see the complete list of today’s Zacks #1 Rank stocks here.

Macy's, Inc. (M - Free Report) is one of the leading department store retailers in the United States.

Macy's expected earnings growth for the current year is 11%. The Zacks Consensus Estimate for the current year has improved by 6.8% over the last 30 days.

Target Corporation (TGT - Free Report) operates as a general merchandise retailer in the United States.

Target’s expected earnings growth for the current year is 14.7%. The Zacks Consensus Estimate for the current year has improved by 0.3% over the last 30 days.

Ross Stores, Inc. (ROST - Free Report) operates as an off-price retailer of apparel and home accessories, primarily in the United States.

Ross Stores’ expected earnings growth for the current year is 23.6%. The Zacks Consensus Estimate for the current year has improved by 0.2% over the last 30 days.

Ralph Lauren Corporation (RL - Free Report) is a major designer, marketer and distributor of premium lifestyle products.

Ralph Lauren’s expected earnings growth for the current year is 12.6%. The Zacks Consensus Estimate for the current year has improved by 2% over the last 30 days.

Under Armour, Inc. (UAA - Free Report) is one of the leading designers, marketers and distributors of authentic athletic footwear, apparel and accessories for a wide variety of sports and fitness activities in the United States and internationally.

Under Armour’s expected earnings growth for the current year is 15.2%. The Zacks Consensus Estimate for the current year has improved by 27.4% over the last 30 days.

V.F. Corporation (VFC - Free Report) designs, manufactures and markets branded apparel and related products in the United States and internationally.

V.F. Corp’s expected earnings growth for the current year is 24.9%. The Zacks Consensus Estimate for the current year has improved by 3.1% over the last 30 days.

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