When it comes to consumer equities, the Christmas shopping season from November to December is critical to their performance. And, with many firms experiencing supply-chain delays and personnel shortages, it’s becoming evident that only the finest retail stocks will be able to handle the challenging situation in the coming weeks.
While the headlines may have given certain shops a Grinch-like feel recently, the reality is that there is a limited group of consumer stocks that are genuinely blazing on all cylinders and looking forward to the last weeks of the year.
Many of these stocks have already outperformed the S&P 500, with either large increases following recent earnings releases or a steady march upward that has put their shares at or near new highs. They all have a lot to offer investors and should be looked at if you’re searching for outperformance in the last months of 2021.
Let’s have a glimpse at a few stocks from the retail sector that experts are calling great bets for the holiday shopping season:
While some customers may only remember Overstock.com (OSTK) as an online discounter, more active traders will realize that this business has been a very unpredictable and quirky investment over the previous few years. Consider how it fell from a peak of about $80 per share in 2017 to less than $7 per share in late 2019, as it struggled to make a profit and saw slow sales growth when compared to other online competitors.
More recently, as part of their major push into the digital currency space, OSTK announced a “digital dividend” in 2020. For every ten shares of common stock owned, shareholders received one digital share of the blockchain-based security token. It more than easily beat Wall Street’s expectations on its last four quarterly earnings reports. On its previous four quarterly earnings reports, it handily exceeded expectations. The current forecasts are promising, showing an optimistic outlook. OSTK indicates 47 cents per share for the current quarter and $686 million in sales. OSTK has a median price target of 127.50, with a high of 157.00 and a low of 110.00 among analysts that provide 12-month price projections. The median is up 49.24% from the previous price, and the consensus is to buy OSTK.
Dick’s Sporting Goods Inc (DKS)
Dick’s Sporting Goods, Inc (DKS), established in Coraopolis, Pennsylvania, is an American sporting goods retailer. Richard “Dick” Stack founded the firm in 1948, and it now has roughly 854 outlets and 50,100 workers. DKS is the largest athletic goods store in the United States, and it is a Fortune 500 company. The typical tale for most consumer equities lately appears to be the lingering impact of the pandemic’s sales crash and a struggle to get back on track as the economy normalizes. DKS stands out, though, having a lot of success despite its competitors’ hurdles.
DKS works a fiscal year ahead of the calendar year. Thus the fact that revenue for 2021 increased by over 10% during the interruptions of calendar 2020 is a big win. Furthermore, predictions for the current fiscal year of 2022 show Dick’s growing even faster, with sales expected to increase by 23% and earnings expected to nearly quadruple over the previous year. DKS currently pays a dividend yield of 1.3%. They have destroyed analysts’ expectations for both sales and EPS for the past four quarters straight, for whatever that’s worth. Its current quarter has shown us an EPS of $2.87 per share and $3.3.billion in sales. The consensus price target for DKS from analysts that provide 12-month predictions is 157.50, with a high of 180.00 and a low of 130.00. From its current price, the consensus projection reflects a 35.17% rise. The consensus among analysts is to buy shares in DKS.
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Abercrombie and Fitch Co (ANF)
Abercrombie & Fitch (ANF) is a casual clothing retailer based in the United States. New Albany, Ohio, is where the company’s headquarters are located. Abercrombie Kids, Hollister Co., and Gilly Hicks are three of the company’s other brands. ANF had 854 locations across all brands as of February 2020. ANF is a store that used to be a major player in American malls and high school cafeterias. Before the 2008 financial crisis, the stock was worth more than $80 a share, but by early 2009, it was worth less than $20. While shares rebounded somewhat once the dust passed, ANF’s real issue was e-commerce competition and shifting consumer tastes, not so much the economic slump.
ANF‘s sluggish shift, which began ten years ago in the aftermath of the financial crisis, was accelerated by the pandemic’s newest upheaval. Consequently, the preceding year’s deficit is on track to be wiped this fiscal year. This would result in a tremendous profit of $4.49 per share, more than the sum of ANF‘s per-share gains since 2014. Its year-over-year financials are all in the green, and projections show both annual and quarterly growth in EPS and revenue. Until it reports again, ANF boasts an EPS of $1.58 and revenue of $1.2 billion in sales. And, let’s not forget that it has beaten earnings expectations for four quarters consecutively. The median price target for ANF from analysts that provide 12-month price projections is 54.50, with a high of 68.00 and a low of 32.00. The estimate is up 53.05% from the previous price. The consensus to buy ANF is strong.
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