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Japanese bank Mizuho recently highlighted the robustness of consumer stocks, aligning with a positive outlook on the sector buoyed by healthy employment and wage growth trends. Encouragingly, U.S. retail sales surged 0.6% in February compared to January and a significant 2.1% year-over-year to $700 billion. The anticipated dip in interest rates later in the year is poised to increase consumer spending power, particularly in big-ticket items such as cars and homes, potentially unlocking a wave of economic activity. With these dynamics at play, here are three consumer stocks worth considering.
O’Reilly Automotive (ORLY)
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Automotive parts retailer O’Reilly Automotive (NASDAQ:ORLY) is capitalizing on the trend of aging vehicles in America, a key driver for its revenue and profits. With new vehicle prices soaring, the likelihood of consumers holding onto their cars longer is on the rise.
Notably, Mizuho has identified ORLY stock as a standout “Buy” in the consumer sector, echoing its promising prospects.
In the past quarter, O’Reilly Automotive saw a 5% year-over-year revenue growth to $3.8 billion and an impressive 11% year-over-year increase in EPS to $9.26.
Amazon (AMZN)
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A recent under-the-radar development catapulted my confidence in Amazon (NASDAQ:AMZN), prompting me to finally take the plunge and invest in AMZN stock. Eli Lilly’s decision to distribute its medication through Amazon Pharmacy is a seismic shift in the traditional pharmaceutical landscape.
The allure of Amazon’s potential dominance in the pharmaceutical market lies in its disruptive ability to streamline the supply chain and deliver drugs at lower costs compared to conventional models. Amazon’s foray into the pharmacy realm, signaled by the partnership with Eli Lilly, signifies a significant leap forward in this lucrative sector.
An additional feather in Amazon’s cap is the 7.7% surge in revenue of non-store retailers in February year-over-year. As the reigning champion of online retail, Amazon’s commanding presence in the e-commerce realm solidifies its position as a key player in the consumer market.
The confluence of favorable catalysts undoubtedly positions Amazon as a prime candidate among consumer stocks for investors seeking growth opportunities.
Netflix (NFLX)
Strategic Wins Propel Netflix (NFLX) in Streaming Arena
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Netflix (NASDAQ:NFLX) emerges as the undisputed champion of the streaming realm, heralded by numerous Wall Street analysts for its prowess and potential.
Strategic Outlook
Evercore, a prominent investment bank, released a bullish note on March 13, envisioning an expansion of Netflix’s subscriber base both domestically and internationally. This forecast stems from the introduction of an ad tier and the implementation of charges for sharing services beyond household boundaries. Reflecting this optimism, Evercore upped its price target on Netflix to $640 from $600, maintaining an “outperform” rating.
Revenue Projections
Simultaneously, Oppenheimer, another respected financial institution, anticipates a surge in Netflix’s average revenue per customer due to its intensified crackdown on password sharing and the growing adoption of its ad-supported subscription tier. Consequently, Oppenheimer revised Netflix’s price target to $725 from $615, aligning with Evercore’s positive sentiment through an “outperform” recommendation.
On the date of publication, Larry Ramer maintained a long position in AMZN. The views expressed in this piece represent the writer’s perspective, adhering to the InvestorPlace.com Publishing Guidelines.
