3 Consumer Stocks to Buy Now: June 2024


  • While consumer confidence has declined, many Americans plan to spend more money on food and pet supplies going forward.
  • Walmart (WMT): WMT is a good defensive pick.
  • Freshpet (FRPT): FRPT is growing rapidly and will benefit from many Americans’ intent to spend more on pet food going forward. 
  • Chipotle (CMG): Goldman Sachs is very upbeat on CMG. 
consumer stocks to buy now - 3 Consumer Stocks to Buy Now: June 2024

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During the current quarter, consumer confidence has dropped to levels not seen since the fourth quarter of 2023. Among the factors making consumers more pessimistic were inflation, their reduced savings and perceived weakness in the labor market. Nonetheless, many Americans plan to spend more money on food going forward. Meanwhile, Gen Z members intend to shell out more for apparel, and beauty products. On the other hand, 27% of high-income members of Gen Z reported that they were looking to buy more expensive items, up from 23% three months earlier. Meanwhile, 17% of respondents stated that they intended to spend more on pet food and supplies, versus just 9% who were looking to shell out less for those products. With all that in mind, let’s take a look at three of the best consumer stocks to buy now.

Walmart (WMT)

Image of Walmart (WMT) logo on Walmart store with clear blue sky in the background
Source: Jonathan Weiss / Shutterstock.com

As I noted in the introduction, many American consumers intend to spend more on beauty products and apparel, while consumers have generally become less confident in the economy.

Walmart (NYSE:WMT) sells a great deal of apparel and a significant amount of beauty products. Additionally, it is well-known for selling low-cost products. As a result, WMT stock should get a boost from both trends.

Walmart is likely already benefiting from these factors as the firm delivered excellent Q1 financial results. Specifically, its operating income jumped 9.6% YOY to $6.84 billion while its top line increased 6% YOY to $161.5 billion.

On June 10, JPMorgan upgraded WMT stock to “overweight” from “neutral.” The bank believes that the name has both offensive and defensive attributes while the retailer can beat analysts’ average estimates going forward. JPMorgan placed an $81 price target on the shares, well above their current level of $67.

Freshpet (FRPT)

A view of several packages of FreshPet (FRPT) pet food, on display at a local grocery store.
Source: The Image Party / Shutterstock.com

As I also noted in the introduction, 17% of American consumers polled plan to raise the amount they spend on pet food and supplies. That’s very good news for Freshpet (NASDAQ:FRPT) which markets natural fresh meals and treats for dogs and cats.

Freshpet stocks have enjoyed a recent rally, sparked by the company’s strong Q1 results. During that quarter, its revenue soared 34% versus the same period a year earlier to $223.8 million while its EBITDA, excluding certain items, soared to $30.6 million from just $3 million in Q1 of 2023.

The company attributed the 30.6% YOY increase in its sales volume in Q1 to its strong business model and the success of its marketing efforts.

Freshpet’s impressive financial results in the last two quarters in combination with Americans’ willingness to spend more on pet food, bode very well for the outlook of FRPT stock and make it one of the best consumer stocks to buy now.

Chipotle (CMG)

a pedestrian walks past a Chipotle, CMG stock
Source: Northfoto / Shutterstock.com

Chipotle (NYSE:CMG) is already growing very rapidly and should benefit a great deal from many Americans’ intention to spend more on food going forward.

Goldman Sachs recently initiated coverage of CMG stock with a “buy” rating. The bank identified the name as being among the top six restaurant stocks. Goldman expects restaurant chains to continue to benefit from strong spending trends going forward, but warned that their ability to increase prices has become more limited. As a result, these companies will become more reliant on attracting additional customers and opening more restaurants.

In Q1, Chipotle’s top line jumped an impressive 14% YOY while its restaurant-level margin climbed 1.9% YOY to 29.5%.

On the date of publication, Larry Ramer did not hold (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.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM. You can reach him on Stocktwits at @larryramer.

Article printed from InvestorPlace Media, https://investorplace.com/2024/06/3-consumer-stocks-to-buy-now-june-2024/.

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