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S&P 500   5,087.03
DOW   39,069.11
QQQ   438.07
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Roku stock and the mother of all entry opportunities
AI powerhouse NVIDIA will hit $1000 soon
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Nvidia, Royal Caribbean rise; Rivian, Etsy fall, Thursday, 2/22/2024
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S&P 500   5,087.03
DOW   39,069.11
QQQ   438.07
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Roku stock and the mother of all entry opportunities
AI powerhouse NVIDIA will hit $1000 soon
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Nvidia, Royal Caribbean rise; Rivian, Etsy fall, Thursday, 2/22/2024
Rivian shares gets discounted; shares can move lower 
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Retail sector resurgence: optimism grows for holiday momentum

Retail sector

Key Points

  • Thanksgiving saw a whopping $38 billion in online spending, signaling a resilient consumer base amid economic uncertainties.
  • A notable 7.8% increase in Cyber Week spending has renewed optimism for the retail sector.
  • The SPDR S&P 500 Retail ETF (XRT) has reflected this optimism, with a 10% surge last month and a 2% rise this week.
  • 5 stocks we like better than Signet Jewelers

The retail sector experienced a robust start to the holiday shopping season as U.S. shoppers were enticed by substantial discounts across various categories, resulting in $38 billion in online spending over the Thanksgiving weekend. 

Despite prevailing economic uncertainties, this surge in spending, which saw a notable 7.8% increase during Cyber Week compared to initial projections of 5.4%, indicates a strong consumer appetite and sets a promising tone for the upcoming shopping period.

Retail sector outlook

That robust start and optimism have made themselves ever-present in the popular retail sector ETF, the SPDR S&P 500 Retail ETF NYSE: XRT, up over 10% last month and almost 2% on the week. 

As optimism grows and the sector breaks above notable resistance and key moving averages, it’s worth taking a closer at the XRT

What is the XRT?

The SPDR S&P Retail ETF aims to mirror the S&P Retail Select Industry Index's performance, an equally weighted market cap index representing the retail sub-industry within the S&P Total Market Index. The ETF invests in various retail sectors, including apparel, automotive, food, department stores, online retail, general merchandise, drug retail, hypermarkets, and supercenters.

The ETF has $484 million in assets under management and offers a dividend yield of 2.01% and a net expense ratio of 0.35%. Its holdings' geographic exposure is predominantly in the United States, with a 98.5% exposure to the region. Regarding sector exposure, the ETF is mainly exposed to the Consumer Discretionary sector, with a 67% exposure.

XRT etf price outlook

The XRT holds a Hold aggregate rating based on evaluations from 697 analysts covering around 71.3% of its portfolio across 50 companies. Looking at its price target, XRT sits at $72.61, suggesting a potential upside of 12.40%. Analysts' predictions span from $48.93 to $97.55, considering the range of evaluations within the portfolio's 50 companies.

The recent performance of top holdings of the ETF

Top holdings XDT etf

The ETF’s top holding is Carvana NYSE: CVNA, with a weight of 3.21%. Year-to-date, the stock is up a whopping 560%, and over the last month, an impressive 20.44%. Its recent performance has lent a helping hand to the ETF, contributing positively to its overall performance. While analysts hold a Reduce rating on CVNA, based on fifteen analyst ratings, its price target of $36.67 predicts an upside of over 17%. 


Its second top holding is Signet Jewelers NYSE: SIG, with a 1.65% weighting. Like CVNA, the stock is up almost 18% over the previous month and is trading near a critical resistance level. All eyes will be on the resistance level of $83 going forward. If the stock can break through this level with authority, it could extend its recent gains, impacting the overall sector's performance and optimism. 

Kohl’s NYSE: KSS is the ETF’s third-largest holding, with a weighting of 1.62%. Year-to-date, the stock has underperformed. However, it has recently put in a double bottom, bouncing off support near $18. Up almost 5% last month, it will be essential to note whether the stock can place a higher low in the upper portion of its recent move, which could signal price stability and a bigger picture momentum shift for the stock and sector. 

For now, optimism has returned to the sector

During Thanksgiving, the retail sector surged with a $38 billion online spending spree, showcasing a resilient consumer base amidst economic uncertainties. This 7.8% increase in Cyber Week spending has reignited optimism for the sector, exemplified by the XRT ETF experiencing positive flows this last month and rising 10% and 2% so far this week. Notably, key holdings like Carvana, Signet Jewelers, and Kohl’s have contributed positively, possibly suggesting that the sector is poised to continue its momentum into the holiday season.

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
SPDR S&P Retail ETF (XRT)N/A$73.32+0.9%1.77%8.88N/AN/A
Carvana (CVNA)
1.8779 of 5 stars
$52.44+6.2%N/A-8.64Reduce$37.93
Kohl's (KSS)
2.5139 of 5 stars
$27.38-0.2%7.31%-20.90Reduce$24.50
Signet Jewelers (SIG)
2.0854 of 5 stars
$105.52+1.5%0.87%12.77Moderate Buy$101.00
Compare These Stocks  Add These Stocks to My Watchlist 

Ryan Hasson

About Ryan Hasson

  • Ry.has7@gmail.com

Contributing Author

Technical Analysis, Momentum Trading, Risk Management

Experience

Ryan Hasson has been a contributing writer for MarketBeat since 2023.

Areas of Expertise

Equity research and analysis, technical analysis and price action, market sentiment and underlying themes, risk management and trading psychology

Education

Bachelor of Commerce in Financial Management

Past Experience

Equities trader, Kershner Trading Group, business analysis consultant, SMB Capital

Zoom International: Business Analysis Consultant.


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