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The Consumer sentiment index release by the University of Michigan showed an upward trend. With the holiday season knocking on the door, a rise in consumer sentiment suggests that consumers are expected to spend more and eventually boost retail sales.
Better-Than-Expected Consumer Sentiment
On Nov 22, the University of Michigan reported a better-than-expected upward revision in U.S. consumer sentiment in November. The index read 96.8, which is above October’s final reading of 95.5.
In fact, the index of consumer expectations for November saw an upward revision of 87.3 from 85.9. October’s figure for the index was reported at 84.2. Richard Curtin, Surveys of Consumers chief economist, said that the level of optimism is quite high and “second only to the period from January 1998 to December 2000.”
Curtin is also certain that consumer spending will remain high due to steady wage growth and a 50-year low unemployment rate. Moreover, majority consumers expect the economy to expand uninterrupted as unemployment and lower interest rates will help inflation.
Holiday Season Around the Corner
Thanks to Thanksgiving, the last week of November seems to be quite happening for the retail space as U.S. consumers gear up for holiday season sales. In fact, this year, the National Retail Federation estimates sales to grow 4%.
The holiday season kick starts on Black Friday, the day after Thanksgiving and this would definitely give a glimpse of consumer’s spending trend this year. Per a JP Morgan analyst report, sales are expected to increase by 4.9% during this holiday season. Holiday sales in 2018 had gained only 1.9% as a major sell-off in the stock market had weighed on shoppers.
5 Retail Stocks to Buy Now
Improvement in consumer sentiment has helped the economy remain buoyant. Given the positive developments, we are sure that this holiday season will see a rally in retail stocks. Here are five retail stocks that flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Target Corporation (TGT - Free Report) is a publicly traded general merchandise retailer that offers beauty and household essentials, food assortments, apparel, accessories, home decor products, electronics, toys, seasonal offerings, and other merchandise. The company’s expected earnings growth rate for the current year is 18% compared with the Retail - Discount Stores industry’s estimated earnings growth of 9.7%. The Zacks Consensus Estimate for its current-year earnings has moved up 3.4% over the past 60 days.
Tempur Sealy International, Inc. (TPX - Free Report) is a publicly traded company that develops, manufactures, markets and distributes bedding products. The company’s expected earnings growth rate for the current year is 28% compared with the Retail - Home Furnishings industry’s estimated earnings growth of 3.5%. The Zacks Consensus Estimate for its current-year earnings has moved up 8.6% over the past 60 days.
Casey's General Stores, Inc. (CASY - Free Report) is a publicly traded company that offers a selection of food, beverages, tobacco and nicotine products; health and beauty aids; automotive products; and other nonfood items. The company’s expected earnings growth rate for the current year is 14.5% compared with the Retail - Convenience Stores industry’s estimated earnings growth of 10.6%. The Zacks Consensus Estimate for its current-year earnings has moved up 1.5% over the past 60 days.
Chuy's Holdings, Inc. (CHUY - Free Report) is a publicly traded company that owns and operates full-service restaurants. The company’s expected earnings growth rate for the current year is 12.5% compared with the Retail - Restaurants industry’s estimated earnings growth of 4%. The Zacks Consensus Estimate for its current-year earnings has moved up 4.2% over the past 60 days.
Insight Enterprises, Inc. (NSIT - Free Report) is a publicly traded company that provides information technology hardware, software, and services solutions. The company’s expected earnings growth rate for the current year is 17.9% compared with the Retail - Mail Order industry’s estimated earnings growth of 14.7%. The Zacks Consensus Estimate for its current-year earnings has moved up 9.6% over the past 60 days.
Today's Best Stocks from Zacks
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This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.
Image: Bigstock
5 Stocks to Gain From Surge in Consumer Sentiment
The Consumer sentiment index release by the University of Michigan showed an upward trend. With the holiday season knocking on the door, a rise in consumer sentiment suggests that consumers are expected to spend more and eventually boost retail sales.
Better-Than-Expected Consumer Sentiment
On Nov 22, the University of Michigan reported a better-than-expected upward revision in U.S. consumer sentiment in November. The index read 96.8, which is above October’s final reading of 95.5.
In fact, the index of consumer expectations for November saw an upward revision of 87.3 from 85.9. October’s figure for the index was reported at 84.2. Richard Curtin, Surveys of Consumers chief economist, said that the level of optimism is quite high and “second only to the period from January 1998 to December 2000.”
Curtin is also certain that consumer spending will remain high due to steady wage growth and a 50-year low unemployment rate. Moreover, majority consumers expect the economy to expand uninterrupted as unemployment and lower interest rates will help inflation.
Holiday Season Around the Corner
Thanks to Thanksgiving, the last week of November seems to be quite happening for the retail space as U.S. consumers gear up for holiday season sales. In fact, this year, the National Retail Federation estimates sales to grow 4%.
The holiday season kick starts on Black Friday, the day after Thanksgiving and this would definitely give a glimpse of consumer’s spending trend this year. Per a JP Morgan analyst report, sales are expected to increase by 4.9% during this holiday season. Holiday sales in 2018 had gained only 1.9% as a major sell-off in the stock market had weighed on shoppers.
5 Retail Stocks to Buy Now
Improvement in consumer sentiment has helped the economy remain buoyant. Given the positive developments, we are sure that this holiday season will see a rally in retail stocks. Here are five retail stocks that flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Target Corporation (TGT - Free Report) is a publicly traded general merchandise retailer that offers beauty and household essentials, food assortments, apparel, accessories, home decor products, electronics, toys, seasonal offerings, and other merchandise. The company’s expected earnings growth rate for the current year is 18% compared with the Retail - Discount Stores industry’s estimated earnings growth of 9.7%. The Zacks Consensus Estimate for its current-year earnings has moved up 3.4% over the past 60 days.
Tempur Sealy International, Inc. (TPX - Free Report) is a publicly traded company that develops, manufactures, markets and distributes bedding products. The company’s expected earnings growth rate for the current year is 28% compared with the Retail - Home Furnishings industry’s estimated earnings growth of 3.5%. The Zacks Consensus Estimate for its current-year earnings has moved up 8.6% over the past 60 days.
Casey's General Stores, Inc. (CASY - Free Report) is a publicly traded company that offers a selection of food, beverages, tobacco and nicotine products; health and beauty aids; automotive products; and other nonfood items. The company’s expected earnings growth rate for the current year is 14.5% compared with the Retail - Convenience Stores industry’s estimated earnings growth of 10.6%. The Zacks Consensus Estimate for its current-year earnings has moved up 1.5% over the past 60 days.
Chuy's Holdings, Inc. (CHUY - Free Report) is a publicly traded company that owns and operates full-service restaurants. The company’s expected earnings growth rate for the current year is 12.5% compared with the Retail - Restaurants industry’s estimated earnings growth of 4%. The Zacks Consensus Estimate for its current-year earnings has moved up 4.2% over the past 60 days.
Insight Enterprises, Inc. (NSIT - Free Report) is a publicly traded company that provides information technology hardware, software, and services solutions. The company’s expected earnings growth rate for the current year is 17.9% compared with the Retail - Mail Order industry’s estimated earnings growth of 14.7%. The Zacks Consensus Estimate for its current-year earnings has moved up 9.6% over the past 60 days.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q3 2019, while the S&P 500 gained +39.6%, five of our strategies returned +51.8%, +57.5%, +96.9%, +119.0%, and even +158.9%.
This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.
See their latest picks free >>