4 Cyclical Stocks To Watch For Your Mid-February Watchlist

4 Cyclical Stock To Consider Adding To Your Watchlist This Week

With the latest bit of economic data pointing towards a very active economy, cyclical stocks are in focus again. After all, this area of the stock market often follows economic cycles closely. As such, investors could be eyeing cyclicals seeing as the latest consumer price index shows a year-over-year rise of 7.5%. This exceeds Wall Street estimates and is the biggest gain since February 1982. 

Separately, the January jobs reports rose at a surprising 467,000, beating Wall Street estimates of 150,000. Given this impressive growth in the job market, it is a positive indication on the state of the economy. Hence, as the economy continues to recover, cyclical stocks may be worth looking at in the stock market today.

Take Estée Lauder (NYSE: EL) for example. Last week, the company announced quarterly earnings of $3.01 per share. Compared to the same period last year, that figure is up by 15.3% and firmly ahead of the Wall Street consensus forecast of $2.64 per share. Elsewhere, Spirit Airlines (NYSE: SAVE) and Frontier Airlines (NASDAQ: ULCC) announced earlier this week plans to merge their operations, adding a new major player to the airline industry. Given these developments, here are four more cyclical stocks to take note of in the stock market today.

Cyclical Stocks To Buy [Or Sell] This February 2022

• The Walt Disney Company (NYSE: DIS)
• Mattel Inc. (NASDAQ: MAT)
• Harley-Davidson Inc. (NYSE: HOG)
• Capri Holdings Limited (NYSE: CPRI)

Walt Disney

One of the more closely watched earnings this week is Walt Disney. Even though most of its core businesses have returned to life, there’s no denying that the real driver for DIS stock remains on how well it held up in terms of Disney+ subscribers. And this week, investors were hoping that its first quarterly update could turn things around. And that is indeed the case as Disney reported its fiscal first quarter earnings that beat analyst estimates.

Cutting to the chase, the entertainment giant raked in a revenue of $21.8 billion, topping analyst expectations of $20.9 billion. The strong quarter can be attributed to the $7.2 billion revenues coming from its Disney Parks, Experiences and Product, double the $3.6 billion it generated in the prior-year quarter. Furthermore, the company also reported adjusted earnings per share of $1.06, beating analyst estimates of $0.63.

Its streaming segment is seeing positive results as well. For the quarter, the company topped expectations with 11.8 million new subscribers in its Disney+ even as growth at rival Netflix (NASDAQ: NFLX) disappointed. Given a strong quarter at Disney, will you consider adding DIS stock to your portfolio?

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Mattel

Mattel is a global toy company that boasts a massive portfolio of entertainment franchises. The likes of which include famous brands such as Barbie, Hot Wheels, UNO, and Thomas & Friends among others. Put into perspective, the company operates in 35 locations and its products are available in more than 150 countries worldwide.

Also yesterday, the toy company released its fourth-quarter and full-year earnings for the fiscal year 2021. For starters, net sales for the quarter were at $1.79 billion, up by 10% against the year before. As for its net income for the quarter, that figure came in at $226 million, an increase of $97 million. Both revenue and earnings exceeded analyst expectations. 

Mattel also issued its 2022 guidance, expecting sales to grow by 8% to 10%. Alongside that, it anticipates between $1.42 and $1.48 earnings a share on an adjusted basis. Ynon Kreiz, CEO of Mattel, also said the company has made significant progress on their transformation strategy, and its turnaround is now complete. Hence, Mattel believes they are now in growth mode and are in a strong position to tackle this year and even the next. On that positive note, will MAT stock be on your watchlist?

Harley-Davidson 

Another top cyclical stock to watch is Harley-Davidson. Briefly, the company operates in two segments, the Motorcycles & Related Products segment and the Financial Services segment. As might have guessed, the Motorcycles segment designs, manufactures and sells at wholesale on-road Harley-Davidson motorcycles. On the other hand, the financial services segment provides wholesale and retail financing and insurance-related programs to Harley-Davidson dealers and their retail customers.  

Earlier this week, Harley-Davidson reported quarterly earnings which beat earnings and revenue estimates. Notably, the motorcycle company raked in a cool $1 billion in revenue, or an increase of 40% from last year’s $725 million. It attributes this revenue growth to stronger motorcycle sales. As for its earnings, the company brought in $0.14 in diluted earnings per share.

Besides that, Harley-Davidson has also completed the first year of its Hardwire Five-year Strategic Plan, a plan targeting profitable growth and shareholder value. And on top of that, it recently entered an agreement to merge its electric motorcycle division, LiveWire, with AEA-Bridges Impact (NYSE: IMPX). This will make LiveWire the first publicly traded electric motorcycle company. Given this news, will be you riding on HOG stock? 

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Capri 

Capri is a global fashion luxury group, consisting of iconic brands that are the leader in design, style, and craftsmanship. Its brands cover the full spectrum of fashion luxury categories including women’s and men’s accessories, footwear, and apparel to name a few. Capri’s portfolio of luxury brands includes Versace, Jimmy Choo, and Michael Kors. Last week, the luxury group announced its financial results for the third fiscal quarter of 2022.

Diving in, revenue rose by 24% to $1.6 billion year-over-year, with better than anticipated results across all three luxury brands. Moving on, Capri reported an adjusted net income of $339 million, compared to $250 million in the prior year. Accordingly, diluted earnings per share was $2.22 compared to $1.65 from last year. For its fiscal year 2022 outlook, the company hopes to see revenue grow to approximately $5.56 billion.

Capri Holdings CEO John Idol said “We are raising fiscal 2022 revenue and earnings guidance based on the strength across all our luxury houses. Looking to fiscal 2023, we expect to generate double-digit revenue and earnings growth. This outlook reflects the success of our ongoing strategic initiatives as well as a continued recovery from the global pandemic.” With the company’s optimistic outlook, would you consider buying CPRI stock?