Wall Street Favorites: 3 Consumer Stocks With Strong Buy Ratings for April 2024


  • The U.S. economy has demonstrated resilience and strong recovery stabilizing inflation around the Fed’s target of 2% through effective policy measures.
  • Costco Wholesale (COST): Steady financials and plans to make new furniture and appliance dedicated stores could catapult Costco’s stock.
  • E.l.f. Beauty (ELF): This extremely bullish growth powerhouse is a buy, as profitability is inevitable from its business model.
  • Vita Coco Company (COCO): With superb financials and a dominant market position, Vita Coco’s expansion into alcoholic options positions the stock for a significant upside.
Consumer Stocks - Wall Street Favorites: 3 Consumer Stocks With Strong Buy Ratings for April 2024

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Looking ahead, the future of the U.S. economy appears promising and resilient. The recent wave of inflation, which initially caused concern, seems to have stabilized around the Fed’s target of 2%. The economy’s unexpected ability to withstand interest rate increases without a significant rise in unemployment suggests a fortunate alignment of factors contributing to a “Goldilocks” scenario — neither too cold with unnecessary unemployment nor too hot with inflationary pressures. This positive trajectory underscores sound policy decisions and a stroke of luck that bodes well for the future.

The economy will continue to perform well, which means that consumer stocks will follow the same trend and also perform well. Furthermore, the consumer market was previously valued at $21.30 trillion in 2023 and is projected to reach $34.44 trillion by 2030, meaning that it has a CAGR of 7.2%. You should invest now because these three “strong-buy” stocks will experience extremely strong growth.

Costco Wholesale (COST)

A photo of a Costco Wholesale Corporation (COST) retail storefront.
Source: Shutterstock

Costco Wholesale (NASDAQ:COST) is one of the largest retail stores in the world. It sells various items, including electronics, furniture, appliances, food, etc. At $713.16, Costco has achieved a 46.86% year-over-year growth. 

Costco’s 2024 financials are off to a great start, with Q1 EPS growth at 18.79% YOY. Additionally, revenue is strong and steady, with consistent positive revenue growth. Last year, Costco ended with a free cash flow (FCF) of $6.745 million, almost doubling the FCF per share from 2022.

With online shopping rates increasing, Costco is at a disadvantage. However, it has announced that it plans to start opening stores dedicated to furniture and appliances. Generally, furniture shopping occurs in person, making this idea a potential advantage for Costco. The company is reported to have an expansion plan for this project already developed.

Costco Wholesale shows strong financials and takes the initiative with innovative new ideas, making it a strong buy.

E.l.f. Beauty (ELF)

an elf branded beauty product on a stone counter
Source: Lisa Chinn / Shutterstock.com

E.l.f. Beauty (NYSE:ELF) is a popular cosmetics company among Gen Z, primarily due to its strong online and social media presence. The company specializes in value-priced makeup and skincare products, selling them online and through retailers. With its stock trading for $167.18, after climbing 98.65% in the past year, it is a bullish favorite. 16 analysts cover the stock, with a median price target of $212.00, representing an increase of 26.81%.

The global cosmetics market is projected to reach $758.05 billion by 2032, exhibiting a CAGR of 9.8%. However, analysts expect ELF to outpace this growth since the company has surged in popularity recently. ELF’s unique ability to provide high-quality, affordable products resonates with younger consumers, and its ability to drive social media engagement bolsters demand.

This innovative strategy translates into robust financials. In Q3 of fiscal 2024, net sales soared to $270.9 million, up 85% YOY. For the full year of fiscal 2024, ELF is forecasting $980-$990 million in net sales, a 69%-71% increase YOY. Additionally, ELF is steadily expanding its market share in mass cosmetics, growing from 4.5% in 2019 to 10.1% in 2023.

Moreover, with its digital-first strategy, ELF launched its first beauty shopping app for Apple Vision Pro. The app allows users to relax and de-stress by guiding them through meditations, stretching exercises, and interactive games. This innovative marketing approach is a strong catalyst for ELF. 

Vita Coco Company (COCO)

A line of Vita Coco (COCO) waters on a shelf.
Source: Nicole Glass Photography / Shutterstock.com

Vita Coco Company (NASDAQ:COCO) is an American beverage company that specializes in coconut and plant waters. Owning over 50% of the total addressable coconut water market, the company commands a dominant position over its competitors. COCO is up 15.20% YOY and has a 12-month median price target of $30.00, representing an 18.86% increase. 

In Q4 2023, Vita Coco reported rock-solid performance that exceeded analyst expectations. For FY 2023, the company’s revenue reached $493.6 million, marking a substantial 15% growth compared to 2022. Net income also saw a dramatic leap, increasing a staggering 497% to $46.6 million YOY. Management is optimistic, as the company expects 2024 net sales to be between $495 million and $505 million. These remarkable financials underscore Vita Coco’s commitment to scaling its profits and growing its platform. 

Furthermore, through a key partnership with booze brand Diageo, Vita Coco is venturing into the ready-to-drink alcoholic beverage market with a premium canned cocktail line. This foray into the evolving alcoholic beverage market will boost the company’s revenue and set it apart from its competitors in the beverage industry. Vita Coco’s focus on selling spiked drinks is significant as the global ready-to-drink alcoholic beverages market is expected to grow at a CAGR of 7.5% through 2029. With Diageo (NYSE:DEO) the No .1 selling spiced rum brand and Vita Coco the No .1 selling coconut water, this partnership positions COCO to capture a significant portion of that market. 

On the date of publication, Michael Que 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.

The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

Michael Que is a financial writer with extensive experience in the technology industry, with his work featured on Seeking Alpha, Benzinga and MSN Money. He is the owner of Que Capital, a research firm that combines fundamental analysis with ESG factors to pick the best sustainable long-term investments.

Article printed from InvestorPlace Media, https://investorplace.com/2024/04/wall-street-favorites-3-consumer-stocks-with-strong-buy-ratings-for-april-2024/.

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