5 First-Rate Retail Stocks the Pros Love – Kiplinger’s Personal Finance

It hasn’t exactly been smooth sailing for retail stocks so far in 2022 – but a comeback could be in the cards.

True, retailers have continued to feel the heat of the macroeconomic headwinds, including inflation and supply-chain disruptions. And rising commodity prices due to the conflict between Russia and Ukraine only adds to the industry’s woes.

This slowdown is seen in the U.S. Census Bureau’s monthly retail sales report, which ticked up marginally (by 0.3%) in February when compared to January’s figures. 

But on a year-over-year basis, retail sales in February were actually up 17.6%. And the National Retail Federation (NRF) projects retail sales this year will grow in the range between 6% and 8%, even in the face of broader headwinds.

“Despite all that’s been thrown at them including inflation, supply-chain constraints, market volatility and significant geopolitical events, consumers remain able and willing to spend,” Matthew Shay, CEO of the National Retail Federation, said.

Underscoring this is data from the Bank of America Institute, which showed credit and debit card spending was up 11% year-over-year in March. 

And despite surging food and energy prices, consumers’ “balance sheets appear strong enough to weather the storm, provided it doesn’t persist too long,” says David Tinsley, senior economist for the Bank of America Institute. 

In this scenario, should investors consider retail stocks? Wall Street analysts seem to say yes. 

Using the TipRanks database, we have shortlisted five retail stocks that are heavily favored by their covering analysts. What’s more, each offers significant upside potential to current levels based on their consensus price targets.

Data is as of April 5. TipRanks consensus price targets and ratings are based on analyst opinions issued over the past three months. Stocks listed in reverse order of consensus rating, and then 12-month price targets.

1 of 5

The RealReal

  • Market value: $728.6 million
  • TipRanks consensus price target: $14.14 (80.6% upside potential)
  • TipRanks consensus rating: Moderate Buy

The RealReal (REAL, $7.83) is an online marketplace for authenticated, resale luxury goods that currently has more than 24 million members. Shares of the company have taken a beating alongside other retail stocks this year, down 32.6% for the year-to-date.

At its Investor Day in late March, the luxury goods retailer announced its Vision 2025 financial targets.

“As we previously committed, we are targeting positive adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] for full year 2024, based on strong top-line growth, operational excellence and fixed-cost management,” said Robert Julian, chief financial officer of The RealReal, in a …….

Source: https://www.kiplinger.com/investing/stocks/604511/first-rate-retail-stocks-the-pros-love

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