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3 Top-Ranked Retail Stocks for a Busy Holiday Season

The Zacks Retail and Wholesale sector has primarily struggled in 2022, facing high inflation. Still, the holiday season is quickly approaching, and spending is expected to see a nice uptick, with travel also still recovering from the pandemic shock.

For those interested in a busy upcoming holiday season, three top-ranked stocks from the sector – TravelCenters of America TA, Sportsman’s Warehouse Holdings, Inc. SPWH, and Booking Holdings, Inc. BKNG – could all be considerations.

Below is a chart illustrating the year-to-date performance of all three stocks, with the S&P 500 blended in as a benchmark.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Let’s take a deeper dive into each one.

TravelCenters of America

TravelCenters Of America is a full-service national travel center chain in the U.S. The company has nationwide locations serving hundreds of thousands of professional drivers and other highway travelers each month, including virtually all major trucking fleets.

The company’s earnings outlook has turned visibly bright over the last several months, helping push the stock into the highly-coveted Zacks Rank #1 (Strong Buy).

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

TA has been on a strong earnings streak, exceeding both revenue and earnings estimates in each of its last three quarters. Just in its latest print, the company registered a 26.4% bottom-line surprise paired with a 3% revenue beat.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

TA’s near-term growth profile is inspiring; the company’s earnings and revenue are forecasted to soar more than 115% and 45% in its current fiscal year (FY22), respectively.

Still, it’s crucial to note that the growth slows down in FY23, with earnings forecasted to take a 45% hit and revenue projected to decrease by 11%.

Sportsman’s Warehouse Holdings, Inc.

Sportsman's Warehouse Holdings, Inc. is an outdoor sporting goods retailer. Its stores sell camping equipment, fishing tackle, hunting and shooting supplies, clothing, footwear, optics, electronics, and accessories.

Analysts have been bullish regarding their earnings outlook as of late, pushing SPWH into a Zacks Rank #1 (Strong Buy).

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Further, shares don’t appear expensive by any stretch; the company’s 7.8X forward earnings multiple is nicely beneath its 8.8X five-year median and represents a 66% discount relative to its Zacks Retail and Wholesale Sector.

SPWH sports a Style Score of an A for Value.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Like TA, Sportsman’s Warehouse has been on a strong earnings streak, exceeding revenue and earnings estimates in each of its last three quarters. In its latest print, the company registered nearly a 40% EPS beat paired with a 4.5% revenue beat.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Booking Holdings, Inc.

Booking Holdings Inc. is one of the world's largest online travel companies, offering hotel rooms, airline tickets, travel insurance, rental cars, vacation packages, cruises, and 'things to do' at customer destinations. The company sports a Zacks Rank #2 (Buy).

BKNG’s forecasted to grow at a rock-solid pace; earnings are forecasted to soar more than 100% in its current fiscal year (FY22) and a further double-digit 30% in FY23.

The projected earnings growth comes on top of forecasted Y/Y revenue increases of 54% and 13% in FY22 and FY23, respectively.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Just over the last month, BKNG shares are up nearly a double-digit 20%, outperforming the S&P 500 by a wide margin and indicating that buyers have heavily stepped up to the plate.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Bottom Line

With the holiday season approaching, consumers look to up their spending, expected to benefit retail and travel-related stocks.

Still, picking strong stocks is always important, which is where the Zacks Rank comes in for the assist.

All three stocks above – TravelCenters of America TA, Sportsman’s Warehouse Holdings, Inc. SPWH, and Booking Holdings, Inc. BKNG – all sport a favorable Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy), indicating that their near-term earnings outlook is bright.


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TravelCenters of America LLC (TA) : Free Stock Analysis Report
 
Sportsman's Warehouse Holdings, Inc. (SPWH) : Free Stock Analysis Report
 
Booking Holdings Inc. (BKNG) : Free Stock Analysis Report
 
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