The consumer discretionary sector includes companies that sell goods and services considered non-essential by consumers. Such as retailers, automotive companies, leisure facilities, and consumer durables. This sector’s performance is closely linked to the economic cycle. Meaning it flourishes during times of economic expansion when consumer confidence and disposable income rise. Thus, stocks in this sector can provide significant growth opportunities during periods of economic strength.
However, investing in consumer discretionary stocks carries its challenges. These stocks are often more volatile than those in stable sectors like consumer staples. This comes as their performance is directly influenced by changes in consumer spending habits. In times of economic downturns or uncertainty, consumers may reduce their discretionary spending, negatively affecting the revenues and profits of companies within this sector.
For investors, consumer discretionary stocks present an opportunity to leverage economic growth and consumer trends. Risk can be mitigated by diversifying within the sector. Investors should keep an eye on economic indicators, consumer confidence levels, and the fundamentals of individual companies when considering these investments. Bearing this in mind, let’s look at two consumer discretionary stocks to check out in the stock market today.
Consumer Discretionary Stocks To Watch Now
- Starbucks Corporation (NASDAQ: SBUX)
- The Walt Disney Company (NYSE: DIS)
Starbucks (SBUX Stock)
Leading off, Starbucks Corporation (SBUX) is a premier roaster, marketer, and retailer of specialty coffee worldwide, owning and operating thousands of retail locations across the globe. Starbucks has grown to become synonymous with coffee culture, offering a wide range of premium coffees, teas, and other beverages, along with food items.
At the end of January, Starbucks announced its Q1 2024 financial results. Getting into it, the company reported earnings of $0.90 per share, along with revenue of $9.43 billion for the quarter. This is versus Wall Street’s estimates which were an EPS of $0.92 per share, with revenue of $9.65 billion. Though, revenue did increase by 8.16% on a year-over-year basis.
Since the start of 2024, shares of Starbucks Corporation stock are down by 1.11% YTD. Meanwhile, during Monday morning’s trading session, SBUX stock opened slightly lower by 0.64%, trading at $92.56 a share.
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Walt Disney (DIS Stock)
Second, The Walt Disney Company (DIS) is a diversified multinational entertainment and media conglomerate. Disney is renowned for its film studios, including Walt Disney Pictures, Pixar, Marvel Studios, and Lucasfilm, theme parks and resorts, and television networks such as ESPN and ABC. Beyond entertainment, the company has expanded into digital media, consumer products, and interactive platforms.
Last month, Walt Disney also reported its first quarter 2024 financial results. In detail, the entertainment giant posted a beat notching in Q1 2024 earnings of $1.22 per share on revenue of $23.55 billion. This came in higher than analysts’ estimates which were an EPS estimate of $0.97, and revenue estimates of $23.47 billion.
In 2024 year-to-date, shares of Disney stock have surged by 24.88%. While, on Monday morning, DIS stock opened green up 1.09% so far, trading at $113.17 a share.
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