Here’s our list of suggestions
While many fiat currencies are experiencing inflation in the wake of the coronavirus-related slowdown, and most progressive tech stocks are losing value, investors are turning to less risky assets to preserve their wealth. Retail stocks may be a good idea if you know which ones to choose. We have analysed the market to help you spot the best opportunities.
Winnebago Industries Inc. (WGO)
P/E ratio: 6.78
Winnebago is a niche automotive retailer selling motorhomes, travel trailers, and commercial community outreach vehicles. The company has also recently added a marine segment to its retail offerings, with the newly-acquired Barletta boat business. In Q4 2021, Winnebago posted record earnings and revenue. Moreover, the anticipated all-electric concept motorhome developed by its Advanced Technology Group (ATG) promises to bring the retailer to the forefront of innovation and sustainability. Average target price for the stock is $91.50, with most analysts agreeing on either “hold” or “buy” rating for WGO.
Build-A-Bear Workshop Inc. (BBW)
P/E ratio: 9.22
The Build-A-Bear company offers interactive retail-entertainment experience. Customers choose a customised stuffed animal and get it assembled and tailored to their own preferences during their visit to the store. In 2021, the company showed a healthy growth of revenues, exceeding both 2020 and 2019 results in every quarter. In early January 2022, Build-A-Bear announced the launch of a new curated gift box solution HeartBox, which represents an expansion of the company’s efforts in the growing adult-to-adult gift-giving market. BBW shares soared after the toy company raised its 2021 guidance from the previous range of $390 – $400 million to $408 – $412 million in annual revenues. “The Company expects its fiscal 2021 results to reflect the highest profitability in its nearly 25-year history,” Build-A-Bear said in a statement.
Home Depot (HD)
P/E ratio: 23.89
Shares of the famous home improvement destination fell a little after the surge in late 2021. Home Depot’s sales skyrocketed during the pandemic with the sharp rise in DIY trends. Although this summer people bought less paint and gardening supplies, their typical receipts grew larger as they included more lumber, flooring and plumbing supplies. The sales of Q3 2021 reached $36.8B, with more than $15.5B growth YTD, and a 9.8% increase from the third quarter of fiscal 2020. Comparable sales for the third quarter of fiscal 2021 increased 6.1%.
Target Corp. (TGT)
P/E ratio: 15.58
Target operates general merchandise stores which sell everything from groceries and essentials to clothing and electronics. The company is a component of the S&P 500 Index and is also one of the largest retailers in the US. Besides, Target has an impressive 50-year history of steadily growing dividend payments. Its third quarter 2021 comparable sales grew 12.7%, on top of 20.7% growth last year, while digital comparable sales grew 29%, following growth of 155% last year. Out of 32 analysts ratings, 19 consider the stock a “buy”, while 9 suggest it’s a “hold”.
Warby Parker Inc. (WRBY)
P/E ratio: N/A
Warby Parker Inc. is a direct-to-consumer eyewear brand. Its products include eyeglasses, sunglasses and contact lenses as well as related optical services and telehealth vision services. The stock debuted on NYSE in September 2021 and was recently upgraded to the “buy” rating by Zacks Investment Research with a $51.00 price objective. The current average price objective is $62.88. The company also has a positive financial outlook for the year ahead. For the fiscal year 2022, Warby Parker expects revenue growth of at least 25% when compared to fiscal year 2021, and a one to two percentage point improvement in fiscal year 2022 adjusted EBITDA margin when compared last year.
P/E ratio: N/A
Meituan is a Chinese investment holding company, operating an e-commerce platform offering food delivery, transportation, travel, shopping and entertainment services. In late 2020, the company released its first AI smart store MAI Shop that integrates an unmanned warehouse and unmanned distribution with AI technology and robots, and cooperates with takeout delivery personnel to supplement distribution capacity. In the third quarter of 2021, Meituan announced robust growth levels for all its business segments. Gross Transaction Value (GTV) for the food delivery business increased by 29.5% year-over-year to RMB 197.1 billion, while the in-store, hotel & travel segment posted a revenue increase of 33.1% year-over-year, reaching RMB8.6 billion. Revenues from the “new initiatives and others” segment increased by 66.7% year-over-year to RMB13.7 billion, primarily driven by the growth in retail businesses and bike-sharing and moped services.