For Immediate Release
Chicago, IL – March 16, 2022 – 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, Casey’s General Stores, Inc. CASY, Jerash Holdings JRSH, Columbia Sportswear Co. COLM, and Gildan Activewear GIL
Here are highlights from Tuesday’s Analyst Blog:
2 Retail Trends Worth Buying Into
2020 ushered in a completely new era into our lives. Up until then, we kind of knew that the world was changing given the number of electronic gadgets popping up all over the place and the growing number of conveniences that technology brings to our lives.
But the pandemic brought a tectonic shift in the way we do things. It’s impossible to overstress this point. While some people do still need to go to work regularly, and some at least part of the time, there has been a paradigm shift in the way we think about work.
In one sense, work has come closer, because distance to the office is no longer an issue.
In another sense, it has brought the world closer, because people are spending more time than ever on their devices. For entertainment, for news, to connect with loved ones and to shop.
In still another sense, the increased flexibility on how we manage our time is leading to new activities and hobbies that potentially present big opportunities. Because these represent segments and categories that will grow steadily if not very rapidly for years to come. And while there may be some pureplays here, existing retailers are increasingly building out these categories because of their potential.
Let’s take a look at a few-
Pets and Related Products
Although an obvious choice given the way this segment soared during the worst days of the pandemic, there are some trends in the market that point to longer-term potential.
Perhaps the most significant of these is the change in choices between generations. We see that older generations that were more family-oriented are less likely to have pets than younger generations that are more individualistic. This sense of aloneness among Gen X and Millennials, as well as the elderly, is pushing demand for companion animals. Which is in turn driving demand for their food, care and services.
A second factor driving demand is the popularity of pet-related content on social media, which is where younger generations live.
A third factor is the increasing availability of all pet products online, which makes it very convenient for pet owners.
A fourth factor is the increasing affluence of pet owners, which makes it easier to consume premium products and services for pets.
While the pandemic induced more people to stay home, it also opened up new avenues for working out (like online yoga sessions, or workout programs via Peloton). And although some are more inclined to and/or more capable of it than others, growing awareness about fitness and healthy lifestyles have made them a part of the to-do list for many. Whoever thought that traveling the miles to work could be so useful in keeping off the pounds!
As far as dressing for work is concerned, people have discovered that we don’t need formals as much anymore. In fact, above-the-waist formal usually suffices for those that need to attend meetings, and others don’t even need that.
Then there is the growing acceptance of fashionable leisure wear to social occasions, which is really expanding the market for the category. One factor supporting this trend is the availability of casual apparel that can double for sports activity because of certain enhanced properties such as moisture management, temperature control and other characteristics that prevent discomfort and potential injury.
The above features, as well as the sustainability, durability and quality of materials are also driving pricing strength, particularly because of rising disposable incomes and preference for leading brands, especially in developing nations.
Women overall are expected to play a bigger role than men because of their increased participation in domestic sports and fitness activities.
Spurring all of the above is the growing availability of these products across online marketplaces, which has made the category much more accessible.
So there is a visible transition to more leisure wear or more athletic wear for leisure, or as retailers are calling the category today, athleisure. This category is expected to grow at a CAGR 6.54% globally between 2022 and 2027, according to Mordor Intelligence. Grandview Research is even more optimistic, and sees the category expanding 8.6% between 2021 and 2028.
5 Stocks to Tap the Potential
The five stocks listed below represent companies that either deal in a number of goods including pet products and/or active lifestyle products.
Target provides an array of goods ranging from household essentials and electronics to toys and apparel for men, women and kids. It also houses food and pet supplies, home furnishings and décor, home improvement, automotive products, and seasonal merchandise.
The Zacks Consensus Estimate for Target’s year ending Jan 2023 is $14.47, up $1.23 (9.3%) in the last 30 days. The estimate for the following year is up $1.27 (8.8%). Revenue and earnings represent growth in both years.
At 14.28X earnings, Target shares are trading close to their low point over the past year. This is below the S&P 500’s 18.56X and the related industry’s 22.48X.
The Zacks Rank #2 (Buy) rated stock has Value, Growth and Momentum scores of A, A and A, respectively.
Casey’s General Stores, Inc.
Casey’s stores offer a variety of food (including freshly prepared foods such as pizza, donuts and sandwiches), beverages, tobacco and nicotine products, health and beauty aids, school supplies, housewares, pet supplies, and automotive products. All but three Casey’s Stores offer fuel for sale on a self-service basis.
In the last 60 days, Casey’s has seen its 2022 (ending April) estimate growing 24 cents (2.8%) and its 2023 estimate growing 48 cents (5.5%). Revenue and earnings are both expected to increase in the two years.
The shares are also not too expensive. At 19.77X earnings, they are trading below their median level over the past year although slightly above the industry’s average of 19.02X.
Casey’s #2 rank and Value, Growth Momentum Scores of A, B and A also indicate that the shares are worth buying.
Jerash Holdings manufactures and exports customized and ready-made sport and outerwear for brands like VF Corporation, Costco Wholesale, PVH Corporation, Walmart, Sears, Hanes, Columbia and Land’s End. Jerash sells jackets, polo shirts, t-shirts, pants and shorts made from knitted fabric, as well as personal protective equipment in the U.S. and internationally.
In the last 30 days, Jerash has seen its 2022 (ending March) estimate growing 6 cents (9.0%) and its 2023 estimate growing 2 cents (2.6%). While revenue estimates aren’t available, earnings estimates point to growth in both years.
The shares also look rather cheap. At 8.70X earnings, they are trading below their median level of 9.88X over the past year and the industry’s average of 12.49X.
Jerash carries a Zacks Rank #2 and Value, Growth and Momentum Scores of A, A and B.
Columbia Sportswear Co.
Columbia Sportswear Company sources, markets and distributes outdoor and active lifestyle apparel, footwear, accessories and equipment in the U.S. and internationally.
Columbia’s earnings estimate for 2022 is up 43 cents (8.1%) in the last 60 days. The 2023 estimate is up 19 cents (3.1%). Revenue and earnings are expected to grow in both years.
Columbia shares carry a Zacks Rank #2. Their Value, Growth and Momentum Scores are B,A and C, respectively.
At 14.71X earnings, Columbia shares are trading close to their lowest point over the past year. While slightly ahead of the industry’s 12.49X, this is well below the S&P 500.
Gildan is a manufacturer and marketer of premium quality branded basic activewear for sale principally into the wholesale imprinted activewear segment of the North American apparel market. It sells premium quality 100% cotton T-shirts and premium quality sweatshirts, in a variety of weights, sizes, colors and styles, as blanks, which are later decorated with designs and logos before sale to consumers.
Gildan shares carry a Zacks Rank #1 (Strong Buy) and it also has favorable Value, Growth and Momentum Scores of C, A and B, respectively.
In the last 30 days, the Zacks Consensus Estimate for Gildan’s 2022 earnings is up 21 cents (8.1%) and 2023 earnings is up 33 cents (11.6%). Revenue and earnings are expected to grow in both years.
The valuation is also attractive. At 12.73X earnings Gildan shares are trading below their median level of 16.81X over the past year and pretty close to the industry’s 12.49X. This is of course well below the S&P 500. So the shares are definitely worth picking up.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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Target Corporation (TGT) : Free Stock Analysis Report
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