The Zacks Retail and Wholesale sector consists of several booming business industries at the moment. Many of these companies will be beneficiaries of increased spending as consumers adjust to high inflation.
Let’s take a look at three Zacks Retail and Wholesale stocks investors should consider buying right now.
Casey’s General Stores (CASY)
Worthy of consideration is Casey’s General Stores (CASY) which lands a Zacks Rank #2 (Buy). The Retail-Convenience Stores Industry is also in the top 5% of over 250 Zacks Industries.
Plus, Casey’s has continued to increase its presence as a regional convenience store chain with operations in 16 midwestern states.
With its expansion, Casey’s stock has outperformed the broader market over the last three years up +61% compared to the S&P 500’s +52%. This has roughly matched the Retail-Convenience Market’s performance.
The strong performance could continue as fiscal 2023 EPS estimates have risen 12% throughout the quarter with FY24 estimates up 4%.
Image Source: Zacks Investment Research
Herbalife (HLF)
Sporting a Zacks Rank #1 (Strong Buy) Herbalife (HLF) stock stands out at the moment with its Retail-Pharmacies and Drug Stores Industry in the top 6% of all Zacks industries.
Fiscal 2023 earnings estimates have risen 15% over the last two months for the provider of science-based weight management products, nutritional supplements, and personal care products. Herbalife’s FY23 earnings are now expected at $2.64 per share compared to EPS estimates of $2.30 two months ago.
With shares of HLF already up 8% YTD, what makes this year’s rising earnings estimates more intriguing is Herbalife’s price-to-earnings valuation. Herbalife stock trades at $16 per share and just 6.1X forward earnings which is nicely beneath the industry average of 8X.
Even better, Herbalife stock trades 71% below its decade-long high of 21.4X and at a 50% discount to the median of 12.2X.
Image Source: Zacks Investment Research
Kroger (KR)
Rounding out the list is grocery store operator Kroger (KR) which also sports a Zacks Rank #1 (Strong Buy). Kroger stock is starting to look attractive with or without its pending acquisition of Albertsons (ACI) as the Retail-Supermarkets Industry is in the top 40% of all Zacks industries.
Over the last 90 days, Kroger’s fiscal 2023 and FY24 earnings estimates have now gone up 6% and 8% respectively. This supports further upside in KR stock which is now up 10% year to date to top the S&P 500’s +4% and the Retail-Supermarkets +2%.
More impressive, Kroger stock is up +65% over the last three years to beat the benchmark and easily top its Zack Subindustry’s +27%.
Image Source: Zacks Investment Research
Takeaway
The rising earnings estimate revisions are a great sign that these Zacks Retail and Wholesale sector stocks are indeed benefiting from strong business environments. There could be plenty of upside as consumers adjust to high inflation and even more as infaltion begins to ease.
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The Kroger Co. (KR) : Free Stock Analysis Report
Casey’s General Stores, Inc. (CASY) : Free Stock Analysis Report
Herbalife LTD. (HLF) : Free Stock Analysis Report
Albertsons Companies, Inc. (ACI) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
