Didn’t you hear? A tightening labor market is threatening to push wages higher in a way that hasn’t been seen since the last economic cycle. Spending, to date, has been driven by asset gains, debt and a drop in the savings rate.
But with real take home pay set to rise, boosted additionally by the recent Trump tax cuts, consumer confidence should be ebullient.
As a result, a number of beaten-down consumer-focused stocks look ripe for a rebound here. With that in mind, here are four consumer stocks to buy:
Consumer Stocks to Buy: Under Armour (UAA)
Under Armour Inc (NYSE:UAA, NYSE:UA) has rebounded off of its early February lows, enjoying a near-50% rise off of the panic lows. The result has taken UAA back up and over its 200-day moving average for the first time since the summer of 2016. Analysts at Telsey Advisory Group recently raised their price target on UAA based on improving industry trends.
The company is next set to report earnings on May 15, before the bell. Analysts are looking for a loss of 5-cents-per-share on revenues of $1.1 billion. When the company last reported on Feb. 13, a break-even result matched estimates by a 4.6% rise in revenues.
Consumer Stocks to Buy: J C Penney (JCP)
J C Penney Company Inc (NYSE:JCP) shares have climbed more than 70% from their early November lows, retaking their 200-day moving average for the first time since late 2016. The leap comes as investors have gained confidence in JCP management’s turnaround efforts. Also providing a lift is ongoing chatter that Nordstrom, Inc. (NYSE:JWN) could be taken private, which is boosting valuations for the entire industry group.
The company will next report results on Mar. 2, before the bell. Analysts are looking for earnings of 45-cents-per-share on revenues of $4 billion. When the company last reported on Nov. 10, a loss of 33-cents-per-share beat estimates by 10 cents, despite a 1.8% drop in revenues.
Consumer Stocks to Buy: Macy’s (M)
Macy’s Inc (NYSE:M) shares have rallied more than 17% off of their panic lows seen earlier this month and they are now threatening to break up and out of a three-month trading range. Analysts at TAG note that the company’s low single-digit comp-store sales growth during the holiday season was the best result since 2014 thanks to a focus on things like customer service and leaner inventory.
The company will next report results on Feb. 27, before the bell. Analysts are looking for earnings of $2.69-per-share on revenues of $8.7 billion. When the company last reported on Nov. 9, earnings of 23-cents-per-share beat estimates by 3 cents on a 6.1% decline in revenues.
Consumer Stocks to Buy: Dick’s Sporting Goods (DKS)
Dicks Sporting Goods Inc (NYSE:DKS) shares are consolidating above their 200-day moving average after rising off of a multi-month bottom near the $26-per-share level. A rally from here will break the 50%+ decline from the late 2016 highs. Such a move is going to happen now, given the positive seasonality for sportswear and equipment heading into the spring. TAG analysts recently upgraded the stock on expectations for strong product innovation in the pipeline and emboldened consumers.
The company will next report results on Mar. 13, before the bell. Analysts are looking for earnings of $1.20-per-share on revenues of $2.7 billion. When the company last reported on Nov. 14, earnings of 30-cents-per-share beat estimates by 4 cents on a 7.4% rise in revenues.