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Top 10 Consumer Discretionary Stocks Of September 2023

best consumer discretionary stocks

Brazil and Mexico also experienced impressive growth, up 28% and 46%, respectively, with Brazil accounting for 51% of its overall revenue. Brazil remains by far the company’s most important country in Latin America. It expects revenues of $6.8 billion to $7.2 billion, with adjusted operating profits of approximately $1.05 billion at the midpoint of its revenue guidance. Meanwhile, Credit Suisse analysts (Outperform) forex volatility indicator met with Tractor Supply management in late January and toured some of its Nashville-area stores. Recently, Men’sHealth revealed that Super Bowl MVP Patrick Mahomes, who won his second NFL Championship on February 12, wears a “lucky” pair of red Lululemon underwear for every football game he plays in. Some analysts have neglected to consider how popular its products are with celebrities and average consumers.

With a market capitalization of approximately $8.6 billion, Lithia Motors, Inc. (LAD) is one such company. With a broad coast-to-coast automotive dealership network of 267 locations selling over 60,000 vehicles as of April 18, 2022, Lithia Motors is one of the largest operators within the U.S. According to a report by McKinsey & Company, the sales of discretionary products are likely to hike in the U.S. as the country is recovering from the pandemic crisis due to vaccine rollout and stimulus payments.

  • That’s expected to translate into revenue of at least $15 billion and net income of $1.13 billion.
  • At the same time, it raised its target price by $20 to $255, above where it’s currently trading.
  • In this article, we discuss 13 best consumer discretionary stocks to buy.

Below is a list of the five best-performing consumer discretionary stocks in the S&P 500 index, ordered by one-year returns. MELI is trading at 5.8 times sales, one of the lowest multiples in the past decade and less than half its five-year average. It’s time to be greedy when others are fearful, especially when it comes to the best consumer discretionary stocks out there. Additionally, the sector’s poor performance in 2022 has made valuations much more attractive in 2023. “While the short-term picture may look murky, there appear to be many instances where stock valuations have overcompensated for macroeconomic concerns,” Michaels says. “In the home-improvement retail industry and others, I have seen strong fundamentals and low valuations – a combination that could be attractive for long-term investors.”

Best Consumer Discretionary Stocks Of 2023

The company is considered a consumer discretionary company because it is related to automobiles, However, given the importance of vehicles to millions in everyday life, there’s a strong sense of consumer staple as well. Of course you have, with all the consumers who have ensured that the fast-food company continues to sell billions and billions of burgers, along with a lot of other things. Arcos Dorados, which has a market cap of nearly $1.9 billion, is a major franchisee of McDonald’s with exclusives in 20 countries and territories in Latin America and the Caribbean.

best consumer discretionary stocks

If you do, you’ll be well-positioned to profit from the sector’s long-term growth potential. While this may seem like a risky place to invest, the truth is that these companies often benefit the most from economic growth. When consumers have more money to spend, they are more likely to splurge on discretionary items. McDonald’sbenefits from a strong global brand and a vast network of restaurant locations. Despite its famous cheap prices, the restaurant brand is generally considered a discretionary stock because this industry is affected by gas prices and income changes. Researching an ETF is often easier than researching individual stocks, but it’s still worth doing, since ETFs are not without risk.

Factors to Consider When Choosing Consumer Discretionary Stocks

NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Our estimates are based on past market performance, and past performance is not a guarantee of future performance. “We view Fox Factory as a strong brand and innovation leader in the growing market for premium vehicle suspensions,” Stifel analysts say.

A company’s ability to generate revenue and profit can be measured by its top-line and bottom-line growth. A company with strong top-line growth is typically able to generate more revenue, while a company with strong bottom-line growth is typically more profitable. Of course, you don’t want to invest in a company that is on the verge of bankruptcy. The diversified consumer services industry includes everything else that fits under the consumer services umbrella.

While LULU stock is flat on a year-over-year basis, it has historically gone on nice runs after being stuck in neutral for an extended period. Negative sentiment aside, Lululemon remains one of the best long-term consumer discretionary stocks. With that in mind, here are the nine best consumer discretionary stocks to buy now. This list includes equities highly beloved by Wall Street analysts, showing solid fundamentals and boasting attractive valuations.

Key financial targets include $8 billion in annual revenue by the end of fiscal 2025, an operating margin of 19%, and earnings per share over $5. Should TPR achieve these goals, it won’t have a problem returning $3 billion through share repurchases and dividends over the next three years. In early January, the company raised its revenue guidance for Q by $55 million at the low end to $2.66 billion and $45 million at the high end to $2.7 billion. So, despite cutting its gross margin guidance by 100 basis points in the fourth quarter, it still expects to earn at least $4.22 a share. The consensus for all of 2022 is $9.95 a share, an 8% increase over 2021. Compared to most of its competitors, it is still moving in a positive direction on the earnings front.

Consumer Stocks to Sell in September Before They Crash & Burn

As a result of the uncertainty, many consumer discretionary stocks have declined this year as investors anticipate potentially softer demand if a recession occurs next year. With the decline, many leading consumer discretionary stocks trade for fairly attractive valuations if the economy recovers and inflation normalizes in the long term. If your horizon is long enough, you might wait, pick up additional shares when prices are down, and see them rebound. If you’re close to retirement, reducing the percentage of consumer discretionary stocks in your portfolio might make sense as a way to control risk near when you might want your money. Consumer discretionary spending refers to the goods and services that consumers purchase with money that is left over after paying for necessities such as food and shelter.

best consumer discretionary stocks

As with many other companies in the consumer discretionary sector, Nike struggled with sales in 2020. Some investors were concerned after Tesla failed to meet their EPS estimates on their most recent earnings report. In this article, we discuss 13 best consumer discretionary stocks to buy. If you want to see more stocks in this selection, check out 5 Best Consumer Discretionary Stocks To Buy.

Some causes of volatility for consumer discretionary stocks can include changes in interest rates. This is because low-interest rates make it cheaper for companies to borrow money, which can be used to invest in growth. The consumer discretionary sector is often one of the most volatile sectors in the stock market. Consumers tend to spend more money on discretionary items when the economy is doing well.

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If you’re looking to invest in growth stocks for a smaller amount, take a look at Benzinga’s picks for stocks under $5, stocks under $10 and stocks under $20. Consumer discretionary stock prices tend to underperform when the economy contracts. That said, there are many well-managed companies in this sector with a proven track record of steady returns even in the worst economic climates. Here are the top consumer discretionary https://bigbostrade.com/ stocks with the highest growth, greatest value, strongest momentum, and most searches on Google. It had mostly been growing until the pandemic, at which point the demand for delivered goods sent it skyrocketing. As inflation hit, the price dropped along with many other stocks, but at the time of writing it’s been on a rebound and looks to have returned to the pre-pandemic trend, making it attractive for the future.

Considering the wide variety of consumer durables stocks available, with growth, value, and income stocks all on offer, almost any investor should be able to find a consumer durables stock that suits their investing style. RH has been a long-time winner on the stock market as it’s carved out a unique brand and has also employed a membership model to encourage repeat purchases and reward customer loyalty. More recently, the company has announced plans to expand into other businesses, including launching a streaming service devoted to architecture design and opening its own hotel and restaurant. RH is the high-end furnishings company formerly known as Restoration Hardware.

Forbes’ top investment experts share 7 overlooked stocks in this exclusive report, 7 Best Stocks To Buy For The Second Half of 2023. In this article, we’ll look at medium-sized businesses (also known as mid-caps) within the consumer discretionary sector and discuss why they could be uniquely positioned to move higher over the weeks and months to come. At the same time, the restaurant chain still has an emphasis on value that keeps customers coming back for more, plus its drive-thrus helped it weather the pandemic better than many others. Although it’s a restaurant chain, the emphasis on value gives it some elements of a consumer staples company. After all, everybody needs to eat, and it’s easy to get a cheap and convenient meal at McDonald’s.

The company went public in August 2013, selling nearly 10 million shares to investors at $15. Its shares are up substantially in the nearly 10 years since, boasting a compound annual growth rate of roughly 24%. Wedbush analysts Tom Nikic and Austin Borina have an Outperform rating on DECK stock with a $485 target price, providing investors with plenty of upside potential over the next 12 months. Thanks to the development of HOKA, the company’s second-biggest brand, investors need not worry.

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. Deckers Outdoor (DECK, $406.39) has a billion-dollar brand with its UGG boots.

Creating uncertainty across the sector is stubbornly high inflation, a rising interest rate environment and anxiety over a potentially larger slowdown or recession in the U.S. economy. Dock David Treece is a former licensed investment advisor and member of the FINRA Small Firm Advisory Board. His focus is on breaking down complex financial topics so readers can make informed decisions. He has been featured by CNBC, Fox Business, Bloomberg, and MarketWatch. Overall, the U.S. stock markets were down for the rolling month, despite posting…

The COVID-19 pandemic created unprecedented challenges for many consumer discretionary companies. But, as the economy reopens, investors have a unique opportunity in the sector. More recently, rising interest rates have the potential to cool economic growth, presenting a challenge for consumer discretionary companies in today’s stock market.

Here are some top consumer discretionary stocks, based on expert opinions and analysis. Many investors look to gain exposure to specific sectors of the market such as consumer discretionary. There are several ETFs that are available that are designed specifically to track the consumer discretionary sector such as the Select Sector SPDR Fund (XLY). The purchase of a new or used vehicle is commonly one of the largest financial transactions of a person’s life. Spending days or months looking to find the perfect vehicle—whether based on the model, color, or price—is the norm. As prices of new and used vehicles continue to be at historically high levels, one group that is uniquely positioned to benefit is the automotive dealerships.

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