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Buy These 5 Retail Stocks With Upside for 2025 as Sales Continue to Grow
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The U.S. retail sector has shown immense courage amid price pressures and higher borrowing rates that took a toll on overall sales. However, the sector has witnessed steady growth in sales over the past few months as inflation continued to cool and the rate cuts by the Federal Reserve eased price pressures.
Retail sales jumped more than expected in November as households spent lavishly on a variety of goods and merchandise, proving that the economy is still on solid ground. As the retail sector shows signs of a solid rebound and the Federal Reserve hints at more rate cuts in 2025, investing in retail stocks will be a wise decision.
The Commerce Department reported on Tuesday that retail sales jumped 0.7% sequentially in November, after rising 0.5% in October and beating economists’ expectations of a rise of 0.5%. Year over year, retail sales increased 3.8% in November.
A robust 2.4% jump in motor vehicle and auto parts sales coupled with a 1.8% rise in online sales, drove overall retail sales in November. The solid jump in November retail sales also indicated an impressive start to the holiday season.
The rise in retail sales signals a robust consumer sector as it accounts for the majority of the nation’s overall economic activity. Consumers are spending more freely as price pressures have eased substantially.
The Federal Reserve started its easing cycle with 50 basis point rate cut in September, followed by a quarter percentage point rate cut in November. Investors are now hopeful of another 25 basis point rate cut in the Federal Reserve’s two-day policy meeting in December, which is underway. Also, the Federal Reserve has hinted at more rate cuts in 2025 as it believes that inflation, despite rising slightly in November, is on track to reach its 2% target.
5 Retails Stocks With Upside
Amazon.com, Inc.
Amazon.com, Inc. is one of the largest e-commerce providers, with sprawling operations in North America, now spreading across the globe. AMZN’s online retail business revolves around the Prime program well-supported by the company’s massive distribution network. Further, the Whole Foods Market acquisition helped Amazon establish a footprint in the physical grocery supermarket space. AMZN also enjoys a dominant position in the cloud-computing market, particularly in the Infrastructure as a Service space, thanks to Amazon Web Services.
Amazon.com has an expected earnings growth rate of 19.9% for next year. The Zacks Consensus Estimate for current-year earnings has improved 9.3% over the last 60 days. AMZN presently carries a Zacks Rank #2.
Image Source: Zacks Investment Research
The Gap, Inc.
The Gap, Inc. is a premier international specialty retailer offering a diverse range of clothing, accessories, and personal care products. GPS offers products for men, women, and children under the Old Navy, Gap, Banana Republic, Athleta, Intermix and Hill City brands.
The Gap’s expected earnings growth rate for next year is 6.9%. The Zacks Consensus Estimate for current-year earnings has improved 7.4% over the past 60 days. GPS currently has a Zacks Rank #2.
Image Source: Zacks Investment Research
Williams-Sonoma
Williams-Sonoma, Inc. is a multi-channel specialty retailer of premium-quality home products. Incorporated in 1973, WSM has five brands and each of the brands is an operating segment.
Williams-Sonoma’s expected earnings growth rate for next year is 2.5%. The Zacks Consensus Estimate for current-year earnings has improved 4.1% over the past 60 days. WSM presently has a Zacks Rank #2.
Image Source: Zacks Investment Research
Tapestry, Inc.
Tapestry, Inc. is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. TPR offers lifestyle products, which include handbags, women’s and men’s accessories, footwear, jewelry, seasonal apparel collections, sunwear, travel bags, fragrance and watches.
Tapestry has an expected earnings growth rate of 6.1% for next year. The Zacks Consensus Estimate for current-year earnings has improved 2% over the last 60 days. TPR presently carries a Zacks Rank #2.
Image Source: Zacks Investment Research
Urban Outfitters
Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home decor and gift products. URBN merchandise is generally sold directly to consumers through stores, catalogs, call centers and e-commerce platforms. Urban Outfitters has operations in the United States, Canada and Europe.
Urban Outfitters’ expected earnings growth rate for next year is 8%. The Zacks Consensus Estimate for current-year earnings has improved 7.2% over the past 60 days. URBN currently sports a Zacks Rank #1.
Image Source: Zacks Investment Research
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Buy These 5 Retail Stocks With Upside for 2025 as Sales Continue to Grow
The U.S. retail sector has shown immense courage amid price pressures and higher borrowing rates that took a toll on overall sales. However, the sector has witnessed steady growth in sales over the past few months as inflation continued to cool and the rate cuts by the Federal Reserve eased price pressures.
Retail sales jumped more than expected in November as households spent lavishly on a variety of goods and merchandise, proving that the economy is still on solid ground. As the retail sector shows signs of a solid rebound and the Federal Reserve hints at more rate cuts in 2025, investing in retail stocks will be a wise decision.
We have selected five retail stocks, namely Amazon.com, Inc. (AMZN - Free Report) , The Gap, Inc. (GAP - Free Report) , Williams-Sonoma, Inc. (WSM - Free Report) , Tapestry, Inc. (TPR - Free Report) and Urban Outfitters (URBN - Free Report) for investors.These stocks have seen positive earnings estimate revisions in the last 60 days, carry a Zacks Rank #1 (Strong Buy) or 2 (Buy) each and are set for solid returns. You can see the complete list of today’s Zacks #1 Rank stocks here.
Retail Sales Jump in November
The Commerce Department reported on Tuesday that retail sales jumped 0.7% sequentially in November, after rising 0.5% in October and beating economists’ expectations of a rise of 0.5%. Year over year, retail sales increased 3.8% in November.
A robust 2.4% jump in motor vehicle and auto parts sales coupled with a 1.8% rise in online sales, drove overall retail sales in November. The solid jump in November retail sales also indicated an impressive start to the holiday season.
The rise in retail sales signals a robust consumer sector as it accounts for the majority of the nation’s overall economic activity. Consumers are spending more freely as price pressures have eased substantially.
The Federal Reserve started its easing cycle with 50 basis point rate cut in September, followed by a quarter percentage point rate cut in November. Investors are now hopeful of another 25 basis point rate cut in the Federal Reserve’s two-day policy meeting in December, which is underway. Also, the Federal Reserve has hinted at more rate cuts in 2025 as it believes that inflation, despite rising slightly in November, is on track to reach its 2% target.
5 Retails Stocks With Upside
Amazon.com, Inc.
Amazon.com, Inc. is one of the largest e-commerce providers, with sprawling operations in North America, now spreading across the globe. AMZN’s online retail business revolves around the Prime program well-supported by the company’s massive distribution network. Further, the Whole Foods Market acquisition helped Amazon establish a footprint in the physical grocery supermarket space. AMZN also enjoys a dominant position in the cloud-computing market, particularly in the Infrastructure as a Service space, thanks to Amazon Web Services.
Amazon.com has an expected earnings growth rate of 19.9% for next year. The Zacks Consensus Estimate for current-year earnings has improved 9.3% over the last 60 days. AMZN presently carries a Zacks Rank #2.
Image Source: Zacks Investment Research
The Gap, Inc.
The Gap, Inc. is a premier international specialty retailer offering a diverse range of clothing, accessories, and personal care products. GPS offers products for men, women, and children under the Old Navy, Gap, Banana Republic, Athleta, Intermix and Hill City brands.
The Gap’s expected earnings growth rate for next year is 6.9%. The Zacks Consensus Estimate for current-year earnings has improved 7.4% over the past 60 days. GPS currently has a Zacks Rank #2.
Image Source: Zacks Investment Research
Williams-Sonoma
Williams-Sonoma, Inc. is a multi-channel specialty retailer of premium-quality home products. Incorporated in 1973, WSM has five brands and each of the brands is an operating segment.
Williams-Sonoma’s expected earnings growth rate for next year is 2.5%. The Zacks Consensus Estimate for current-year earnings has improved 4.1% over the past 60 days. WSM presently has a Zacks Rank #2.
Image Source: Zacks Investment Research
Tapestry, Inc.
Tapestry, Inc. is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. TPR offers lifestyle products, which include handbags, women’s and men’s accessories, footwear, jewelry, seasonal apparel collections, sunwear, travel bags, fragrance and watches.
Tapestry has an expected earnings growth rate of 6.1% for next year. The Zacks Consensus Estimate for current-year earnings has improved 2% over the last 60 days. TPR presently carries a Zacks Rank #2.
Image Source: Zacks Investment Research
Urban Outfitters
Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home decor and gift products. URBN merchandise is generally sold directly to consumers through stores, catalogs, call centers and e-commerce platforms. Urban Outfitters has operations in the United States, Canada and Europe.
Urban Outfitters’ expected earnings growth rate for next year is 8%. The Zacks Consensus Estimate for current-year earnings has improved 7.2% over the past 60 days. URBN currently sports a Zacks Rank #1.
Image Source: Zacks Investment Research