Stock Analysis & Ideas

3 Consumer Stocks on Top Analysts’ Radar

The present global economic landscape represents a heady cocktail of uncertainties and volatility, which is enough to scare investors away from the capital markets. It is because of these uncertain trends that making a prudent investment decision to protect and grow one’s investments has become so burdensome.

However, in these testing times, investors can find shelter in some of the most trusted names in the consumer goods sector. Consumer goods products have brand recognition, an easy recall value, and are used by the general public in their everyday lives.

To that end, TipRanks brings to you three Analysts’ Top stocks in this sector that can be a solid choice for investors. Let’s have a look at them.

Target Corporation (NYSE: TGT)

Minneapolis, MN-based retail giant and department store chain operator Target has been an established player in the consumer goods sector for decades. As of 2021, the company operates 1,926 stores throughout the United States.

In terms of price performance so far this year, Target has outperformed its sector – the S&P 500 Consumer Discretionary Index. While Target is up 0.6%, the index is down a whopping 14.3% over the same period.

In its latest quarterly results, Target’s revenue and earnings witnessed impressive growth. While revenue was up 9.4% year-over-year to $31 billion, its earnings stood at $3.19 per share, up 19.2% from the same quarter last year. Analysts had expected the company to post earnings and revenue of $2.86 per share and $31.41 billion, respectively.

On April 8, Gordon Haskett Corporation analyst Charles Grom upgraded the stock to Buy from Hold and raised the price target from $255 to $300, which implies upside potential of 28.6% from current levels.

According to the analyst, Target’s prospects look strong. Grom is of the opinion that the company has the requisite wherewithal to tide through the current economic headwinds in the global economy.

Overall, the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 15 Buys and six Holds. TGT’s average price target of $278.63 implies that the stock has upside potential of 19.4% from current levels. Shares have gained 13.8% over the past year.

Polaris Inc. (NYSE: PII)

Established in 1954, Polaris is a Roseau, MN-based manufacturer of motorcycles, snowmobiles, all-terrain vehicles, and neighborhood electric vehicles.

Although the stock has been a laggard so far this year, declining 5.2%, it performed better than the S&P 500 Index, which dropped over 6.4% in the same period.

The company’s latest quarterly results were also upbeat, as both revenue and earnings surpassed estimates. Revenues for the quarter ended December 31, 2021, stood at $2.17 billion, up 1% year-over-year. Further, the figure surpassed the consensus estimate of $2.13 billion. Although EPS fell 35.3% from the year-ago period to $2.16, it comfortably surpassed the consensus estimate of $2.02 per share.

On April 8, Robert W. Baird analyst Craig Kennison reiterated a Buy rating on the stock with a price target of $150, which implies upside potential of 43.5% from current levels.

According to the analyst, although the company remains impacted by supply chain problems and other economic headwinds, its valuation remains a source of comfort. Further, the analyst opines that its market-leading position and active buyback programs make it an attractive choice for investors in the long run.

Consensus among analysts is a Strong Buy based on six Buys and two Holds. Polaris’ average price target of $140.13 implies upside potential of 34% from current levels. Shares have declined 26.1% over the past year.

Levi Strauss & Co. (NYSE: LEVI)

San Francisco, CA-based apparel major Levi Strauss has been catering to the lifestyle needs of customers since 1853. Presently, the company has roughly 2,800 company-operated stores worldwide.

The stock has declined almost 24% so far this year, much worse than the S&P 500’s decline of 6.4%. However, the fall can be attributed to wider market concerns that have burnt a hole in consumers’ pockets.

Meanwhile, Levi Strauss’ solid quarterly results lend credence to the fact that the company has strong fundamentals. LEVI reported quarterly net revenues of $1.6 billion, up 22% year-over-year. Further, the figure surpassed the consensus estimate of $1.54 billion. Its EPS for the quarter stood at $0.46, up 35.3% from the same quarter last year, topping the consensus estimate of $0.41 per share.

On April 7, UBS analyst Jay Sole reiterated a Buy rating on the stock. The analyst, however, lowered the price target from $37 to $34, which implies upside potential of 81% from current levels.

According to the analyst, even though the macroeconomic headwinds in the near future can hurt the company’s prospects in the short term, its brand value, market-leading position and global franchise give it a strong footing. Moreover, the stock is fairly valued at current levels.

Consensus among analysts is a Strong Buy based on 10 unanimous Buys. LEVI’s average price forecast of $30.90 implies upside potential of 64.5% from current levels. Shares have declined 29% over the past year.

Bottom Line

Considering the current volatile market trends, the aforementioned stocks may be a safe bet for investors who want to stay away from unnecessary risks.

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