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5 Retailers to Watch as New Stimulus Rekindles Hope of Recovery
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A downward spiral in retail sales for a second successive month in November, surge in COVID-19 cases and reimposition of restrictions in some states dashed hopes of economic recovery from a pandemic-induced recession. But with lawmakers reaching a consensus on a $900-billion stimulus package, the economy got a new lease of life. The last-minute deal on second economic-rescue plan will definitely provide some financial relief to millions of households and corporates that have been struggling after the initial coronavirus-relief package started to dry up.
Per the CNBC report, the COVID-19 aid bill includes direct payments of $600 to most individuals and $300 weekly supplemental unemployment benefits through mid-March. The report also suggests that $13 billion will go toward boosting Supplemental Nutrition Assistance Program and funding food banks, among other programs. Notably, lawmakers have also allocated funds for procurement and distribution of coronavirus vaccines.
Clearly, stimulus checks for individuals and children, and mass vaccination will lend the much-needed support to the economy. Economists cited that if business organizations and industries started to operate at an optimum level it could potentially ramp up hiring activity, and in turn prompt consumers to spend freely. Markedly, consumer spending accounts for more than two-third of U.S. economic activity.
That said here we have highlighted five stocks from Retail-Wholesale sector that have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and witnessed solid earnings estimate revisions in the last 60 days.
5 Prominent Picks
Investors can count on Tapestry, Inc. (TPR - Free Report) , which provides luxury accessories and branded lifestyle products. The company is progressing well on its Acceleration Program. The program aims at transforming the company into a leaner and more responsive organization, building significant data and analytics capabilities with focus on enhancing digital and omnichannel capabilities, and operating with a clearly defined path and strategy for each brand, namely Coach, Kate Spade and Stuart Weitzman. This Zacks Rank #1 company has a trailing four-quarter earnings surprise of 38.8%, on average. It has an estimated long-term earnings growth rate of 11.7%. Further, the Zacks Consensus Estimate for earnings for the current and next financial year has moved up 23.6% and 17%, respectively, in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
You may consider MarineMax, Inc. (HZO - Free Report) . The company’s strategic investments in high-margin businesses such as finance, insurance, brokerage, marina and service operations bode well. Markedly, the acquisitions of Northrop & Johnson in July this year and Fraser Yachts last year strengthened its position in the superyacht category. Recently, the company announced the buyout of SkipperBud’s and its affiliate, Silver Seas Yachts. The acquisition meaningfully enhances MarineMax’s presence in the Great Lakes region and the West Coast of the United States. Impressively, this recreational boat and yacht retailer has a trailing four-quarter earnings surprise of 263.6%, on average. Also, the Zacks Consensus Estimate for earnings for the current and next financial year has risen 53.8% and 86.2% north, respectively, in the past 60 days. The stock sports Zacks Rank #1.
The ODP Corporation (ODP - Free Report) , a provider of business services and supplies, products, and technology solutions, is worth considering. Management commenced a multiyear restructuring plan “Maximize B2B” in May 2020 with the objective to realign the company’s operational focus to support "business-to-business" solutions and IT services business units, and improve costs. Through this initiative, the company intends to accelerate growth on its B2B platform, lower dependency on its retail consumer operations, and maximize cost savings. Management expects this restructuring plan to be completed by the end of 2023. This Zacks Rank #1 company has a trailing four-quarter earnings surprise of 3.1%, on average, and a long-term earnings growth rate of 6.8%. Also, the Zacks Consensus Estimate for earnings for the current and next financial year has jumped 31.1% and 44.2%, respectively, in the past 60 days.
You may also invest in DICK'S Sporting Goods, Inc. (DKS - Free Report) . Favorable customer demand, a solid product portfolio and strength in the online platform have been contributing to the company’s upbeat performance. It has been witnessing significant growth across core categories, including hardlines, apparel and footwear. Notably, the company has been undertaking technology enhancements to provide customers seamless omni-channel experience. During third-quarter fiscal 2020, e-commerce sales surged 95%, while, as a percentage of total net sales, the same increased to 21% compared with 13% last year. Also, the Zacks Consensus Estimate for earnings for the current and next financial year has gone up 51.8% and 20.7%, respectively, in the past 60 days. This Zacks Rank #1 company has an estimated long-term earnings growth rate of 5.6%. The company has a trailing four-quarter earnings surprise of 34.7%, on average.
Target Corporation (TGT - Free Report) is also worth betting on. This general merchandise retailer has been making investments to enhance omni-channel capacities, come up with new brands, and remodel or refurbish stores to cater to consumer demand and behavior in the new normal. The company has been consolidating its position in the food and beverage space with a robust portfolio of owned and exclusive brands. The company’s commitment to offer unique shopping experience with safe and convenient options, including contactless Drive Up and Order Pickup, and same-day delivery with Shipt, are worth a mention. The company has a trailing four-quarter earnings surprise of 52.4%, on average. Also, the Zacks Consensus Estimate for earnings for the current and next financial year has moved north by 22.3% and 9.1%, respectively, in the past 60 days. This Zacks Rank #2 company has an estimated long-term earnings growth rate of 8.5%.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?
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5 Retailers to Watch as New Stimulus Rekindles Hope of Recovery
A downward spiral in retail sales for a second successive month in November, surge in COVID-19 cases and reimposition of restrictions in some states dashed hopes of economic recovery from a pandemic-induced recession. But with lawmakers reaching a consensus on a $900-billion stimulus package, the economy got a new lease of life. The last-minute deal on second economic-rescue plan will definitely provide some financial relief to millions of households and corporates that have been struggling after the initial coronavirus-relief package started to dry up.
Per the CNBC report, the COVID-19 aid bill includes direct payments of $600 to most individuals and $300 weekly supplemental unemployment benefits through mid-March. The report also suggests that $13 billion will go toward boosting Supplemental Nutrition Assistance Program and funding food banks, among other programs. Notably, lawmakers have also allocated funds for procurement and distribution of coronavirus vaccines.
Clearly, stimulus checks for individuals and children, and mass vaccination will lend the much-needed support to the economy. Economists cited that if business organizations and industries started to operate at an optimum level it could potentially ramp up hiring activity, and in turn prompt consumers to spend freely. Markedly, consumer spending accounts for more than two-third of U.S. economic activity.
That said here we have highlighted five stocks from Retail-Wholesale sector that have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and witnessed solid earnings estimate revisions in the last 60 days.
5 Prominent Picks
Investors can count on Tapestry, Inc. (TPR - Free Report) , which provides luxury accessories and branded lifestyle products. The company is progressing well on its Acceleration Program. The program aims at transforming the company into a leaner and more responsive organization, building significant data and analytics capabilities with focus on enhancing digital and omnichannel capabilities, and operating with a clearly defined path and strategy for each brand, namely Coach, Kate Spade and Stuart Weitzman. This Zacks Rank #1 company has a trailing four-quarter earnings surprise of 38.8%, on average. It has an estimated long-term earnings growth rate of 11.7%. Further, the Zacks Consensus Estimate for earnings for the current and next financial year has moved up 23.6% and 17%, respectively, in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
You may consider MarineMax, Inc. (HZO - Free Report) . The company’s strategic investments in high-margin businesses such as finance, insurance, brokerage, marina and service operations bode well. Markedly, the acquisitions of Northrop & Johnson in July this year and Fraser Yachts last year strengthened its position in the superyacht category. Recently, the company announced the buyout of SkipperBud’s and its affiliate, Silver Seas Yachts. The acquisition meaningfully enhances MarineMax’s presence in the Great Lakes region and the West Coast of the United States. Impressively, this recreational boat and yacht retailer has a trailing four-quarter earnings surprise of 263.6%, on average. Also, the Zacks Consensus Estimate for earnings for the current and next financial year has risen 53.8% and 86.2% north, respectively, in the past 60 days. The stock sports Zacks Rank #1.
The ODP Corporation (ODP - Free Report) , a provider of business services and supplies, products, and technology solutions, is worth considering. Management commenced a multiyear restructuring plan “Maximize B2B” in May 2020 with the objective to realign the company’s operational focus to support "business-to-business" solutions and IT services business units, and improve costs. Through this initiative, the company intends to accelerate growth on its B2B platform, lower dependency on its retail consumer operations, and maximize cost savings. Management expects this restructuring plan to be completed by the end of 2023. This Zacks Rank #1 company has a trailing four-quarter earnings surprise of 3.1%, on average, and a long-term earnings growth rate of 6.8%. Also, the Zacks Consensus Estimate for earnings for the current and next financial year has jumped 31.1% and 44.2%, respectively, in the past 60 days.
You may also invest in DICK'S Sporting Goods, Inc. (DKS - Free Report) . Favorable customer demand, a solid product portfolio and strength in the online platform have been contributing to the company’s upbeat performance. It has been witnessing significant growth across core categories, including hardlines, apparel and footwear. Notably, the company has been undertaking technology enhancements to provide customers seamless omni-channel experience. During third-quarter fiscal 2020, e-commerce sales surged 95%, while, as a percentage of total net sales, the same increased to 21% compared with 13% last year. Also, the Zacks Consensus Estimate for earnings for the current and next financial year has gone up 51.8% and 20.7%, respectively, in the past 60 days. This Zacks Rank #1 company has an estimated long-term earnings growth rate of 5.6%. The company has a trailing four-quarter earnings surprise of 34.7%, on average.
Target Corporation (TGT - Free Report) is also worth betting on. This general merchandise retailer has been making investments to enhance omni-channel capacities, come up with new brands, and remodel or refurbish stores to cater to consumer demand and behavior in the new normal. The company has been consolidating its position in the food and beverage space with a robust portfolio of owned and exclusive brands. The company’s commitment to offer unique shopping experience with safe and convenient options, including contactless Drive Up and Order Pickup, and same-day delivery with Shipt, are worth a mention. The company has a trailing four-quarter earnings surprise of 52.4%, on average. Also, the Zacks Consensus Estimate for earnings for the current and next financial year has moved north by 22.3% and 9.1%, respectively, in the past 60 days. This Zacks Rank #2 company has an estimated long-term earnings growth rate of 8.5%.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?
These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Start Your Access to the New Zacks Top 10 Stocks >>