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The Zacks Analyst Blog Highlights: Costco, Target, Casey's and SunOpta

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·7 min read
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For Immediate Release

Chicago, IL – November 24, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Costco Wholesale Corporation COST, Target Corporation TGT, Casey’s General Stores, Inc. CASY and SunOpta, Inc. STKL.

Here are highlights from Tuesday’s Analyst Blog:

Online Grocery Sales Continue to Grow: 4 Stocks to Buy 

 

E-commerce has been driving retail sales since the onset of the pandemic and one of the biggest beneficiaries has been essential goods like grocery. In fact, the pandemic has finally helped people realize the benefits and ease of shopping online.

The growing demand from customers over the past year has even made retailers shift focus and they are now strengthening their e-commerce arm. This has been boosting online grocery sales over the past year. Given this situation, stocks like CostcoTargetCasey’s and SunOpta are likely to benefit.

Online Grocery Sales Jump

People have been more inclined toward shopping online since the COVID-19 outbreak in a bid to maintain social distance and avoid contracting the virus. This has helped boost online sales of grocery products almost every month.

Although millions are vaccinated now and physical stores have opened, people are still shopping online. According to the Brick Meets Click/Mercatus Grocery Shopping Survey, the U.S. online grocery market grew 1.3% in October, accounting for a total of $8.1 billion in sales from $8 billion in September.

Pickup/delivery and ship-to-home dollar sales in October accounted for $6.4 billion and $1.7 billion, respectively. Moreover, in October, almost 50% of the total U.S. households, which is 63.8 million, shopped groceries online. In October, a monthly average user placed an average of 2.74 orders. This is 35% more than the pre-pandemic levels and just 6% lower than the record high attained in May 2020, when the pandemic was at its peak.

Online Grocery Sales Poised to Grow

The massive vaccination drive has given people the confidence to step outside more often. However, the pandemic is far from over, which has made people continue to depend on e-commerce for shopping given the safety aspects.

According to a new research from Acosta, the online grocery market in the United States is poised to grow in the coming days. According to Acosta’s “Growth of Online Grocery Shopping Shows No Signs of Slowing Down” report, 31% of the respondents plan to increase shopping for their groceries and food online.

Moreover, 64% of the people who shop online will continue to do so in the coming days. Among those shopping groceries online, 51% said they started doing so during the pandemic and will now continue to stick to online shopping.

Among those who started shopping online during the pandemic, 20% now always buy groceries online or most of the time, while 14% shop for food products online regularly.

Also, experts believe that e-commerce is here to stay as grocery players are fast shifting focus to the online business. Groceries are necessities and people will continue buying them.

Our Choices

Given this situation, investing in grocery stocks with a strong online presence should lead to solid returns going forward. We have picked four such stocks, each currently carrying either a Zacks Rank #1 (Strong Buy) or #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Casey’s General Stores offers a variety of food selection (including freshly prepared foods such as pizza, donuts and sandwiches), beverages, tobacco and nicotine products, health and beauty aids, school supplies, houseware, and pet supplies.CASY operates two stores under the name "Tobacco City," selling primarily tobacco and nicotine products, one liquor store, and one grocery store.

Casey’s expected earnings growth rate for the current year is 3.6%. The Zacks Consensus Estimate for current-year earnings has improved 1.8% over the past 60 days. Shares of CASY have gained 4.2% in the past 30 days. Casey’s General Stores has a Zacks Rank #2.

Costco Wholesale sells high volumes of food and general merchandise (including household products and appliances) at discounted prices through membership warehouses. Costco is one of the largest warehouse club operators in the United States. COST also operates e-commerce websites in the United States, Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan and Australia.

Costco Wholesale’s expected earnings growth rate for the current year is 9.7%. The Zacks Consensus Estimate for current-year earnings has improved 5% over the past 60 days. Shares of COST have gained 12% in the past 30 days. Costco Wholesale has a Zacks Rank #2.

Target has evolved from being a pure brick & mortar retailer to an omni-channel entity. TGT has been investing in technologies, improving websites and mobile apps, and modernizing the supply chain to keep pace with the changing retail landscape and better compete with pure e-commerce players.

Target reported third-quarter fiscal 2021 earnings of adjusted earnings of $3.03 per share, beating the Zacks Consensus Estimate of $2.87 and rising 8.7% from the year-ago period. TGT’s total revenues for the quarter came in at $25,652 million, increasing 13.3% year over year and surpassing the Zacks Consensus Estimate of $24,906 million. 

Target’s expected earnings growth rate for the current year is 39.6%. The Zacks Consensus Estimate for current-year earnings has improved 2.6% over the past 60 days. Shares of TGT have advanced 8.7% in the past six months. Target carries a Zacks Rank #2.

SunOpta is an operator of high-growth ethical businesses, focusing on integrated business models in the natural and organic food, supplements and health and beauty markets. STKL has three business units: the SunOpta Food Group, which specializes in sourcing, processing and distribution of natural and organic food products integrated from seed through packaged products; the Opta Minerals Group, a producer, distributor, and recycler of environmentally friendly industrial materials; and the SunOpta BioProcess Group, which engineers and markets proprietary steam explosion technology systems for the pulp, bio-fuel and food processing industries. 

SunOpta’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings for STKL has improved 25% over the past 60 days. SunOpta has a Zacks Rank #2.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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Target Corporation (TGT) : Free Stock Analysis Report
 
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Casey's General Stores, Inc. (CASY) : Free Stock Analysis Report
 
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