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The Zacks Analyst Blog Highlights: Walmart, Macy's, Buckle, Best Buy, and The Gap

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·7 min read
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For Immediate Release

Chicago, IL – October 14, 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: Walmart Inc. WMT, Macy's, Inc. M, Buckle, Inc. BKE, Best Buy Co., Inc. BBY, and The Gap, Inc. GPS.

Here are highlights from Wednesday’s Analyst Blog:

5 Solid Retail Stocks to Buy Ahead of Holiday Shopping Season

The holiday season is around the corner and retailers are upbeat about sales getting a boost from aggressive buying on important days like Black Friday, Cyber Monday and Christmas Eve. Retail sales had taken a hit last year but the holiday season proved to be good.

With economic reopening in progress and the vaccination drive in full swing, the picture looks a lot brighter this year. This is likely to further aid the retail sector this year as predictions are of record sales both in percentage points and dollars spent.

Holiday Season to Boost Retail Sales

Despite the pandemic hitting retailers hard last year, the holiday season came as a savior, with sales hitting record high. E-commerce was largely responsible for this. Experts predict that this year too will be equally great, with the holiday season starting early. 

According to Deloitte, retail sales are projected to jump between 7% and 9% and will exceed 2020’s increase of 5.8%. However, Deloitte isn’t the only one that sees retail sales getting a boost this holiday season.

According to Mastercard SpendingPulse, holiday season retail sales are projected to grow 7.4% on a year-over-year basis and grow 11.1% from 2019. One of the major reasons for the jump will be due to a rebound in in-store shopping, which was not possible last year due to the pandemic. The ‘75 Days of Christmas’ holiday season will begin in October, with sales expected to grow 6.8% during this period, according to Mastercard SpendingPulse.

Much like these two firms, Bain also predicts 7% year-over-year growth in retail sales this holiday season, reaching $800 billion.

Great Holiday Season Ahead

Retailers bank heavily on the holiday season every year. This time they are likely to flourish particularly after a difficult 2020. Black Friday is projected to be the biggest shopping day this holiday season. Pent-up savings and government stimulus are expected to further strengthen the spending power of consumers.

That said, e-commerce will continue to play an important role in this year’s sales. Last year, e-commerce came as a savior not only during the holiday season but all through the pandemic.

Although in-store sales will pick up this year following the economic reopening, people will prefer shopping online given that the fears of the pandemic are far from over. Moreover, shopping habits have also changed since the onset of the pandemic, as people have realized the ease of shopping online.

According to Mastercard SpendingPulse, online revenues are projected to grow 7.6% year over year and a whopping 57% from 2019.  In fact, retail sales are being driven by e-commerce for the past several months now. Online sales in August jumped 8.1% month over month and 82% from the previous year.

Our Choices

Given this scenario, it would be ideal to invest in retail stocks with a strong online presence. We have hand-picked five stocks for you. Each of the stocks carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Walmart Inc. has evolved from just being a traditional brick-and-mortar retailer into an omnichannel player. In this regard, the acquisitions of Bonobos, Moosejaw and Parcel; partnership with Shopify and Goldman Sachs; delivery programs like Walmart + and Express Delivery; and investment in the online e-commerce platform Flipkart are noteworthy. 

The company’s expected earnings growth rate for the current year is 15.5%. The Zacks Consensus Estimate for current-year earnings has improved 6% over the past 60 days. 

Macy's, Inc. is in the process of a complete makeover and has outlined plans under its three-year Polaris Strategy to adapt better to the new retail ecosystem. Notably, the company is banking on Backstage locations, Vendor Direct, Store Pickup, Loyalty Program, Growth150 stores, ‘mobile first’ strategy and Destination Businesses. 

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 74.4% over the past 60 days. 

 Buckle, Inc. is a leading retailer of medium to better-priced casual apparel, footwear and accessories for fashion-conscious young men and women.

The company’s expected earnings growth rate for the current year is 59.4%. The Zacks Consensus Estimate for current-year earnings improved 13.1% over the past 60 days. 

Best Buy Co., Inc. 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 26.2%. The Zacks Consensus Estimate for current-year earnings has improved 17.3% over the past 60 days.

The Gap, Inc. is a premier international specialty retailer offering a diverse range of clothing, accessories, and personal care products. It offers products for men, women and children under the Old Navy, Gap, Banana Republic, Athleta, Intermix and Hill City brands.

The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings improved 27.3% over the past 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/performancefor information about the performance numbers displayed in this press release.

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Macy's, Inc. (M) : Free Stock Analysis Report
Walmart Inc. (WMT) : Free Stock Analysis Report
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The Gap, Inc. (GPS) : Free Stock Analysis Report
Buckle, Inc. The (BKE) : Free Stock Analysis Report
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