Are These The Best Consumer Discretionary Stocks To Invest In Today?
As investors continue to ride the wave of positive earnings, for now, consumer discretionary stocks are in focus. For the most part, this area of the stock market today has not had the best year so far. Across the board, consumer discretionaries alongside other cyclical sectors has come under fire due to growing macro headwinds. This ranges from surging inflation and supply chain issues to the global supply shortages stemming from the geopolitical conflict in Eastern Europe. All of which would, in theory, weigh in on the industry.
Despite all this, the latest batch of earnings and outlooks seem to be fueling investor interest in the area again. Take Tesla (NASDAQ: TSLA) for example. The electric vehicle (EV) goliath is surging after posting stellar results in its latest quarterly update on Wednesday. In it, Tesla saw its automotive sales surge by 87% year-over-year, totaling $16.86 billion. At the same time, banking firms such as Bank of America (NYSE: BAC) also note that consumer spending remains healthy despite inflation. According to BofA CEO Brian Moynihan, this is thanks to greater spending capacity resulting from lower loan balances. After considering all this, could one of these consumer discretionary stocks be worth noting in the stock market now?
Consumer Discretionary Stocks To Buy [Or Sell] Ahead Of May 2022
- American Airlines Inc. (NASDAQ: AAL)
- Amazon.com Inc. (NASDAQ: AMZN)
- United Airlines Holdings Inc. (NASDAQ: UAL)
- Shopify Inc. (NYSE: SHOP)
- AT&T Inc. (NYSE: T)
American Airlines Inc.
For starters, we have American Airlines, or AAL, for short. In essence, AAL is a leading name among airline operators now. Like most of its airline peers, the company has and continues to recover from its pandemic era lows. Through its portfolio, AAL facilitates almost 6,700 daily flights to nearly 350 destinations across more than 50 countries. Following its latest quarterly earnings release, AAL stock is gaining plenty of attention now.
Getting straight to it, the company is looking at a loss per share of $2.32 on a revenue of $8.9 billion. This would top Wall Street forecasts of a $2.40 loss and revenue of $8.826 billion for the quarter. In terms of year-over-year comparisons, AAL’s revenue has more than doubled. For the current quarter, the company is expecting a turn to profit, citing strong bookings mitigating rising fuel costs. As such, would you consider AAL stock a top buy now?
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Amazon.com Inc.
Amazon is a consumer tech company that focuses on e-commerce, digital streaming, and cloud computing. In fact, it is one of the most valuable companies in the world and also one of the most influential economic and cultural forces as well. This week, the company announced that it will let other online merchants piggyback on its Prime service to deliver goods quickly to their customers. The company recently launched its Buy with Prime service, allowing third-party merchants to use Amazon’s vast shipping and logistics network to fulfill orders on their own sites.
It also announced 37 new renewable energy projects around the world, marking yet another significant milestone for its path to power 100% of its operations with renewable energy by 2025. The new projects increase the capacity of Amazon’s renewable energy portfolio by nearly 30%, from 12.2 GW to 15.7 GW, and bring the total number of renewable energy projects to 310 across 19 countries. “Our commitment to protecting the planet and limiting Amazon’s impact on the environment has led us to become the largest corporate buyer of renewable energy in the world in both 2020 and 2021. Given the growth of our business, and our mission to run 100% of Amazon’s operations on renewable energy, we aren’t slowing our renewable investments down,” said Andy Jassy, CEO of Amazon. Given this piece of news, should investors consider AMZN stock?
United Airlines Holdings Inc.
Another cyclical firm to consider in the stock market now would be United Airlines or UAL, for short. Similar to AAL, the company is also actively working towards its pre-pandemic operational proficiency. As it stands, UAL is on schedule to fly 87% of its 2019 levels in the current quarter. With this upward momentum in mind, investors could also be tuning in to UAL stock now.
Namely, a key takeaway from UAL’s earnings call this week would be the company’s outlook. In detail, UAL is expecting the current fiscal year to be a notable turning point for its business. The company is projecting positive earnings for the first time since the initial onslaught of the pandemic. Overall, UAL chalks this up to soaring bookings and travel-hungry passengers buying tickets despite rising prices. For its second fiscal quarter, UAL is expecting to see the highest quarterly sales in its history. Because of this, could UAL stock be worth looking at for today?
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Shopify Inc.
Following that, we have Shopify, a Canadian multinational commerce company. The company is a leading provider of essential internet infrastructure for commerce. It offers tools to start, grow, market, and manage a retail business of any size. The company has over 1.6 million businesses in approximately 175 countries. This week, there were reports that Shopify is looking to acquire Deliverr.
Deliverr is a company that leverages cutting-edge machine learning and optimization technology to build a smart fulfillment network. It enables any merchant to delight their customers with fast and cost-effective fulfillment Sources told Bloomberg that the deal could value the San-Francisco-based company at more than $2 billion. The company will also be announcing its first-quarter financials on May 5, 2022, before the markets open. All things considered, is SHOP stock a buy right now?
AT&T Inc.
AT&T is a telecommunications company that connects more than 100 million U.S. consumers. Impressively, it is one of the largest telecommunications companies in the world. Recently, it has just announced that it had closed the transaction to combine its WarnerMedia business with Discovery. Just this week, it reported its first-quarter financials, beating consensus estimates.
Diving in, it reported consolidated revenue of $38.1 billion and diluted earnings per share of $0.65. The company also ended the quarter with a free cash flow of $700 million. AT&T says that its momentum in growing customer relationships is reaching historical levels and it has had its best first quarter for postpaid phone adds in more than a decade. For these reasons, will you consider adding T stock to your portfolio?
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