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The Zacks Analyst Blog Highlights: Target, Kroger, Best Buy, Systemax and Tapestry

Zacks Equity Research
·7 min read

For Immediate Release

Chicago, IL – November 19, 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: Target Corp. TGT, The Kroger Co. KR, Best Buy Co., Inc. BBY, Systemax Inc. SYX and Tapestry, Inc. TPR.

Here are highlights from Wednesday’s Analyst Blog:

U.S. Retail Sales Jump in October: 5 Solid Stocks to Buy

The retail sector is gradually recovering, with sales rising for the sixth straight month in October. Although the rise was lower than expected, the good sign is that the pandemic-ravaged sector is getting back on its own feet.

Moreover, the holiday season is approaching, which in all likelihood is good to give retail sales the much-required push. Also, if the second round of stimulus gets sanctioned in the coming months, it may give consumers more purchasing power, which is likely to boost retail sales.

Retail Sales Increase in October

U.S. retail sales increased 0.3% to $553.3 billion in October, the Commerce Department said on Nov 17. Also, it reflects an 8.5% year-over-year jump. Nonstore retailers increased 29.1% year over year.  The reading follows September’s jump of 1.6%. However, retail sales missed expectations of a 0.5% increase.

One of the major reasons behind this decline is that the coronavirus relief benefits lapsed for many, who shied away from spending more. Also, sales at restaurants and bars may have been hit once again owing to the rise in coronavirus cases. However, the good sign is that retail sales have now increased for the sixth straight month after hitting a nadir in March and April due to the coronavirus-related lockdown.

Holiday Season to Boost Sales

The growing cases of coronavirus have once again raised fears in the minds of people. However, people will continue to spend at least on essential goods and e-commerce, which have been breathing life into the retails sector, and are likely to be the preferred choices for shopping over the coming months.

Moreover, the holiday season is about to start and retailers like every year will be hoping for sales to pick up. According to a Deloitte report, retail sales are expected to increase 1-1.5% to between $1.147 trillion and $1.152 trillion during the November-to-January period. Also, the economy is gradually trying to stand back on its feet, with the GDP growing a historic 33.1% in the third quarter, which indicates that the retail sector is on track for a steady recovery.

Our Choices

The jump in retail sales in October once again signals a steady recovery. Although coronavirus fears have once again gripped the nation, it is quite unlikely that the government will go for a lockdown as the economy needs to get back on its feet. However, e-commerce will continue to play a dominant role in the coming months, which is only going to benefit the retail sector. Given this situation, it might be prudent to invest in retail stocks that also have a strong online presence.

Target has evolved from just being a pure brick & mortar retailer to an omni-channel entity. The company 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.

The company’s expected earnings growth rate for the current year is 13.9%. The Zacks Consensus Estimate for current-year earnings has improved 1.8% over the past 60 days. Target carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Kroger operates supermarkets, multi-department stores, marketplace stores, and price impact warehouse stores. Its combination food and drug stores offer natural food and organic sections, pharmacies, general merchandise, pet centers, fresh seafood, and organic produce; and multi-department stores provide apparel, home fashion and furnishings, outdoor living, electronics, automotive products, and toys.

The company’s expected earnings growth rate for the current year is 49.1%. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the past 60 days. Kroger has a Zacks Rank #2.

Best Buy is a multinational specialty retailer of consumer electronics, home office products, entertainment software, communication, food preparation, wellness, health, security, appliances and related services. 

The company’s expected earnings growth rate for next year is 18%. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the past 60 days. Best Buy has a Zacks Rank #2.  

Systemax is a direct marketer of brand name and private label products, including personal desktop computers, notebook computers, computer-related products, and industrial products, in North America and Europe. 

The company’s expected earnings growth rate for next year is 22.3%. The Zacks Consensus Estimate for current-year earnings has improved 26.9% over the past 60 days. Systemax has a Zacks Rank #2.  

Tapestry is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. The company offers lifestyle products, which include handbags, women’s and men’s accessories, footwear, jewelry, seasonal apparel collections, sunwear, travel bags, fragrance and watches. 

The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 21.6% over the past 60 days. Tapestry has a Zacks Rank #1.

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Media Contact

Zacks Investment Research

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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/performancefor information about the performance numbers displayed in this press release.

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Target Corporation (TGT) : Free Stock Analysis Report
Best Buy Co., Inc. (BBY) : Free Stock Analysis Report
Systemax Inc. (SYX) : Free Stock Analysis Report
The Kroger Co. (KR) : Free Stock Analysis Report
Tapestry, Inc. (TPR) : Free Stock Analysis Report
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