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The Zacks Analyst Blog Highlights: Crocs, Vista Outdoor, YETI Holdings, Acushnet and Kontoor Brands

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·6 min read
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For Immediate Release

Chicago, IL – December 15, 2020 – 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: Crocs Inc. CROX, Vista Outdoor Inc. VSTO, YETI Holdings Inc. YETI, Acushnet Holdings Corp. GOLF and Kontoor Brands Inc. KTB.

Here are highlights from Monday’s Analyst Blog:

Consumer Discretionary Picks on Covid-19 Vaccine Approval

Last week was disappointing for Wall Street as all the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — fell 0.6%, 1% and 0.7%, respectively. The massive spike in new COVID-19 cases in several states of the United States and lingering concerns about the approval of the second coronavirus-aid package were predominantly responsible for the stock market weakness.

However, market participants rejoiced on Friday evening after the FDA gave emergency authorization to the first coronavirus vaccine developed by Pfizer and BioNTech. Although nationwide vaccination will take some time, the approval of a vaccine will be a game-changer for 2021.

Importance of Coronavirus Vaccine Approval

The FDA authorization of a COVID-19 vaccine this year means that the economy will reopen and gradually operate at the pre-pandemic level. The news will have a strong impact on the stock market.

Since the lockdowns imposed in March, the U.S. economy is operating at a significant sub-optimal level. Consequently, the cyclical or reopening stocks will get a big push from market participants aside from the growth-oriented technology and communications stocks.

Moreover, strong pent-up demand is likely to drive the U.S. economy in 2021. Personal savings rate is high in 2020 due to concerns over coronavirus-led economic uncertainties.

Consumers were restrained or restricted by the government to spend on those items that were closed during lockdowns. Reopening of the economy with the easing of the pandemic will significantly boost personal spending, the largest component of the U.S. GDP.

Importance of Consumer Discretionary Sector

The consumer discretionary sector comprises businesses that sell goods and services, which are considered non-essential by consumers. These are the products that consumers can avoid without any major consequences to their well-being.

In fact, these goods are desirable only if the available income of an individual is sufficient to purchase them. This is in sharp contrast to consumer staples products that are absolutely necessary.

Notably, the U.S. economy was performing well buoyed by strong consumer spending before the outbreak of coronavirus. The consumer discretionary sector is likely to be a major gainer in stock markets as the U.S. economy will gradually return to the pre-pandemic level as  more parts of it reopen.

Our Top Picks

We have narrowed down our search to seven consumer discretionary stocks that have strong growth potential for 2021 and have witnessed solid earnings estimation revisions within the last 60 days. Each of our picks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Crocs designs, develops, manufactures, markets and distributes casual lifestyle footwear and accessories for men, women and children worldwide. It offers various footwear products, including clogs, sandals, flips and slides, shoes, and boots under the Crocs brand name. The company has an expected earnings growth rate of 11.7% for next year. The Zacks Consensus Estimate for next-year earnings has improved 1.7% over the last 7 days.

Vista Outdoor designs, manufactures and markets consumer products for outdoor sports and recreation markets in the United States and internationally. It operates in two segments: Shooting Sports and Outdoor Products. The company has an expected earnings growth rate of more than 100% for the current year (ending March 2021). The Zacks Consensus Estimate for the current year has increased 37.1% over the last 60 days.

YETI Holdings designs, markets, retails and distributes products for the outdoor and recreation market under the YETI brand in the United States, Canada, Australia and Japan. The company has an expected earnings growth rate of 17.8% for next year. The Zacks Consensus Estimate for next-year earnings has increased 19.2% over the last 60 days.

Acushnet Holdings designs, develops, manufactures and distributes golf products in the United States, Europe, the Middle East, Africa, Japan, Korea, and worldwide. It operates through four segments: Titleist Golf Balls, Titleist Golf Clubs, Titleist Golf Gear and FootJoy Golf Wear. The company has an expected earnings growth rate of 46.8% for next year. The Zacks Consensus Estimate for next-year earnings has increased 0.6% over the last 30 days.

Kontoor Brands is a lifestyle apparel company that designs, manufactures, sources, markets, and distributes apparel under the Wrangler and Lee brands in the United States and internationally. The company has an expected earnings growth rate of 42.6% for next year. The Zacks Consensus Estimate for next-year earnings has increased 24.4% over the last 60 days.

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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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Crocs, Inc. (CROX) : Free Stock Analysis Report
 
Acushnet Holdings Corp. (GOLF) : Free Stock Analysis Report
 
Vista Outdoor Inc. (VSTO) : Free Stock Analysis Report
 
YETI Holdings, Inc. (YETI) : Free Stock Analysis Report
 
Kontoor Brands, Inc. (KTB) : Free Stock Analysis Report
 
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