3 Retail Stocks Targeting at Least 50% Upside by 2028
Retail stocks did particularly well during the COVID-19 pandemic as fiscal stimulus contributed to higher consumer savings rates. Increased spending artificially boosted demand as stay-at-home orders persisted.
Fast forward a few years later and the economic landscape looks much different. The economy is now recovering from a prolonged period of inflation and higher interest rates. This has affected consumer spending patterns, with a majority going toward food, shelter and transportation.
However, the Federal Reserve is about to reverse course and cut interest rates in 2024. This is ultimately good news for the retail sector, as spending patterns will be boosted by cheap borrowing costs. With low-interest rates on the table in 2024, these retail stocks are poised to outperform.
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Now, let’s discover the three best retail stocks targeting at least 50% upside by 2028!
TJX Companies (TJX)
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TJX Companies (NYSE:TJX) has been one of the best retail stocks to buy for the last several years. The company has outpaced the S&P 500 (NYSEARCA:SPY) over the last five years, rising 96% vs. 80%.
TJX Companies is an off-price retailer with operations in the United States, Canada, Europe, and Australia. Some of their notable brands include Tj-Maxx, Marshalls, HomeGoods and Winners. At the end of fiscal 2023, TJX had over 4,900 stores spanning across nine different countries.
In their latest Q3 2023, TJX revenue increased 9% YOY to $13.27 billion. GAAP EPS increased 13%, driven by higher sales volume and cost-structure optimization. Marmax and HomeGoods delivered strong comparable sales growth, entirely driven by higher foot traffic. The outlook for the 2023 fiscal year remains strong, and CEO Ernie Herrman raised full-year guidance for comparable sales and EPS. This makes TJX one of the best retail stocks to buy for 2024.
Hershey Co (HSY)
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Hershey Co (NYSE:HSY) is the best sleeper retail stock to keep on your radar in 2024. Over the last decade, Hershey has seen robust revenue, EPS, and dividend growth making it a top retail stock contender.
Founded more than a century ago, Hershey is the 4th largest chocolate company in the world by revenue. Some of their notable brands include Hershey’s, Reese’s, Rolo and Twizzlers. The company has continued to innovate and is an international leader in sustainability and corporate social responsibility.
In their latest quarterly results, Hershey reported strong revenue and EPS while reaffirming their 2023 outlook. Revenue saw strong double-digit growth of 11% YOY.
However, what was even more impressive was the company’s EPS which skyrocketed 30% to $2.52 per share. Growth in the quarter was primarily driven by planned inventory increases in the North American salty snacks segment. Reported gross margins also saw incremental improvements, increasing 430 basis points to 44.9% from Q3 2022. With CAGR in its dividend per share staying at around 10% over the last decade, HSY is a strong buy retail stock for 2024.
Marriott International (MAR)
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Marriott International (NASDAQ:MAR) is an American multinational hospitality company headquartered in Maryland, United States. They are primarily known for operating their hotel chains through brands including The Ritz Carlton, St. Regis, JW Marriott, Marriott Hotels, and Courtyard.
The hotel sector would not be one that you would expect to deliver strong financial performance. Only a few years ago, many investors became bearish on the hotel stocks with the emergence of short-term rental opportunities. However, the truth is that hotels will not be going away anytime soon and MAR stock earnings have proven that time and time again.
In Q3 2023, system-wide revenue per available room increased 8.8% YOY. Revenue was primarily driven by international markets, growing 21.8% compared to Q2 2022. Furthermore, diluted EPS saw robust growth of close to 30% with adjusted EBITDA of $1.14 billion. The company added 17,200 rooms during the quarter, with their development pipeline of 557,000 rooms suggesting growth to continue through FY24.
On the date of publication, Terel Miles 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.
Terel Miles is a contributing writer at InvestorPlace.com, with more than seven years of experience investing in the financial markets.
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