The debate over potential rate cuts later this year and the stickiness in inflation should have investors considering the best blue-chip stocks to buy in April. Moreover, with blue-chip stocks trailing behind growth stocks this year, it’s an opportune time to consider adding them to your portfolios.
Savvy investors will be quick to pounce on potential bargains in blue-chip stocks. Short-term challenges have weighed down certain stocks in the category. For those who are patient, it could yield incredible rewards as the economic scenario stabilizes again and stock values recover. Therefore, a defensive strategy against market volatility and economic downturns remains key in underscoring their value as a stabilizing force amidst uncertainty.
Best Blue-Chip Stocks to Buy in April: Lululemon Athletica (LULU)
There’s an excellent buying opportunity in Athletic apparel retailer Lululemon Athletica (NASDAQ:LULU) stock following its fourth-quarter (Q4) earnings dip. LULU stock shed more than 10% of its value, posting weak forward guidance due to a deceleration in North American sales.
Nevertheless, the strength of LULU’s fast-growing international business strengthens its bull case. Q4 sales showed a remarkable 54% bump in global markets, compared to just 9% in the Americas. Sales overall were up 16% to $3.21 billion, beating analyst estimates of $8.03 million. As we advance, sales from international markets will continue playing a key role in driving top-line growth, supported by its robust omni-operating model.
Moreover, virtually every profitability metric for LULU is in the green, boasting double-digit net income, EBITDA, and free-cash-flow margins. Most of its profitability metrics are ahead of historical averages, with the firm staying focused on driving its business forward with agility and discipline.
Netflix (NFLX)
Streaming pioneer Netflix (NASDAQ:NFLX) usually makes the list of the top blue-chip entertainment stocks. Through its transformative streaming service, the platform has disrupted the cable industry and then some. It’s a powerhouse in its burgeoning industry, finishing 2023 with a record 260.28 million in global paid memberships, up almost 13% from 2022.
2023 was another blowout year for the company, finishing with revenues of $8.83 billion in Q4, up from $7.85 billion in 2022. Moreover, it forecasts first quarter (Q1) sales of $9.2 billion, a colossal jump from $8.1 billion brought in during Q1.
Furthermore, in its 2023 shareholder letter, Netflix’s management discussed the incredible untapped potential in advertising and gaming, highlighting its significant growth potential. With over $600 billion at stake in pay TV, film, games, and branded advertising, Netflix captures just 5% of this vast opportunity.
Walmart (WMT)
Arkansas-based Walmart (NYSE:WMT) is the biggest retailer in the world. Its sheer dominance in its niche is linked to its vast scale and widespread presence, with more than 10,800 stores.
The sheer volume of its business enables the retailer to negotiate discounted rates with suppliers and effectively pass the lower prices to its customer base. The strength of its market positioning was on full display last year because rampant inflation rates drove an influx of shoppers to their nearest Walmart stores.
Therefore, in each of last year’s four quarters, it bested analyst estimates on its top line by solid margins. In Q4, sales were up a spectacular $173.4 billion, a 5.7% increase from the prior-year period, led by a 4% sales bump due to higher customer traffic. Also, e-commerce has been a money-spinner for the company in recent years, and 2023 was perhaps a milestone year when sales from the division surpassed the $100 billion mark. For the full year, company sales stood at a powerful $648.1 billion, a 6% jump from 2022, with profits skyrocketing 32.2% to $6.6 billion on a YOY basis.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
