Wall Street’s favorite retail stocks coming out of major earnings week – SNT Oline
It was a big week for investors in retail stocks with some of the sector’s biggest names reporting. But with the week in the rearview mirror, investors are now evaluating crosscurrents. Walmart posted an earnings beat and strong guidance, while Foot Locker noticeably missed Wall Street’s expectations for the quarter and gave uninspiring guidance for future performance. And the reports come amid broader questions facing the sector around if consumers can continue spending amid rising interest rates and concerns over a possible recession. With this landscape in mind, CNBC Pro screened for the most-liked retail stocks on Wall Street. To find these, CNBC Pro looked through all stocks with market caps of at least $1 billion in the SPDR S & P Retail ETF (XRT) , excluding car and auto dealership names. The 12 stocks below have at least 55% of analysts rating them as buy and an average upside of more than 10%. Walmart made the list, with more than three out of every five analysts rating the stock a buy and the average upside implying the stock could rally 10.8% over the next year. The retail giant’s shares have risen 5.7% since 2023 began. The company beat Wall Street’s expectations on top and bottom lines in its fiscal first quarter when it reported Thursday, noting that grocery and online sales helped offset softness in clothing and electronics. Walmart also raised its full-year earnings guidance following the strong quarterly report. TJX was another reporting company that made the list. The T.J. Maxx, Marshalls and HomeGoods parent reported a revenue miss and offered weak guidance for the future, though earnings per share in the quarter were better than expected, according to FactSet. Shares have slipped about 0.3% this year. But more than 56% of analysts rate the stock a buy, with the average price target showing that TJX could rally 11.3%. E-commerce giant Amazon also passed the screen, with buy ratings from about three-fourths of analysts and an average upside of 12.8%. The stock has rallied 38% this year, mounting a comeback along with other Big Tech names. Amazon beat analysts’ expectations on revenue for the first quarter when it reported last month. However, investors focused on the uncertainty around the future performance of its cloud business. Discount retailer Dollar General has a buy rating from nearly three-fifths of analysts and an average upside that implies the stock could advance 10.7% in the next year. That would mark a turn, with the stock down more than 12% year to date. The company is slated to report earnings for its first fiscal quarter on June 1.