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Saudi viewers angry over apparent ban on World Cup streaming
Cuba's informal market finds new space on growing internet
S&P 500   4,026.12
DOW   34,347.03
QQQ   286.92
Considerations When Rolling Over a 401(k) into a Roth IRA
See how to make money instead of spending it on Black Friday with this offer (Ad)
Sober or bright? Europe faces holidays during energy crunch
Biden eases Venezuela sanctions as opposition talks resume
See how to make money instead of spending it on Black Friday with this offer (Ad)
Whole Foods decision to pull lobster divides enviros, pols
Airbnb has a plan to fix cleaning fees
See how to make money instead of spending it on Black Friday with this offer (Ad)
Saudi viewers angry over apparent ban on World Cup streaming
Cuba's informal market finds new space on growing internet
S&P 500   4,026.12
DOW   34,347.03
QQQ   286.92
Considerations When Rolling Over a 401(k) into a Roth IRA
See how to make money instead of spending it on Black Friday with this offer (Ad)
Sober or bright? Europe faces holidays during energy crunch
Biden eases Venezuela sanctions as opposition talks resume
See how to make money instead of spending it on Black Friday with this offer (Ad)
Whole Foods decision to pull lobster divides enviros, pols
Airbnb has a plan to fix cleaning fees
See how to make money instead of spending it on Black Friday with this offer (Ad)
Saudi viewers angry over apparent ban on World Cup streaming
Cuba's informal market finds new space on growing internet
S&P 500   4,026.12
DOW   34,347.03
QQQ   286.92
Considerations When Rolling Over a 401(k) into a Roth IRA
See how to make money instead of spending it on Black Friday with this offer (Ad)
Sober or bright? Europe faces holidays during energy crunch
Biden eases Venezuela sanctions as opposition talks resume
See how to make money instead of spending it on Black Friday with this offer (Ad)
Whole Foods decision to pull lobster divides enviros, pols
Airbnb has a plan to fix cleaning fees
See how to make money instead of spending it on Black Friday with this offer (Ad)
Saudi viewers angry over apparent ban on World Cup streaming
Cuba's informal market finds new space on growing internet

Three Consumer Stocks That Could Outperform In Q4 

Three Consumer Stocks That Could Outperform In Q4 
  • Dick’s Sporting Goods sustains high comps relative to pre-pandemic levels.
  • Starbucks’ new CEO is a game-changer and not the only catalyst. 
  • Ulta Beauty is growing revenue and grabbing market share.

The Q3 earnings cycle is about to heat up and it looks like it could be a rough reporting season. Signs of weakness are everywhere in the market but there are still some pockets of strength. In regard to the consumer, Consumer Staples (NYSEARCA: XLP) is a likely winner as people alter their buying habits, and Consumer Discretionary (NYSEARCA: XLY) is a likely loser, still, even here there are names that stand out as potential winners. Dicks Sporting Goods (NYSE: DKS), Starbucks (NASDAQ: SBUX), and Ulta Beauty (NASDAQ: ULTA) are all discretionary names to an extent but also have staple-like qualities that, when combined with branding, management, and eCommerce, make them solid consumer-oriented names for long-term investors, especially when their shares are trading at such deep discounts to recent highs. 


Dick’s Sporting Goods Looking Good Going Into Q3

Dick’s Sporting Goods surprised the market with its Q2 results and guidance for the second half and that has it set up well going into Q3. The company reported a decline in comps and net sales that were weaker than expected but versus a very tough comp that has the pre-pandemic comparison running at +38%. While Dick’s may continue to see some YOY weakness its market share gains and eCommerce channels should help sustain the very-high pre-pandemic comparison and outperform the consensus figures. 

The analysts are supporting Dick’s Sporting Goods price action as well. The 19 analysts with current coverage produced 15 positive commentaries since just before the Q2 results were released and afterward. Their activity has the Marketbeat.com consensus rating up to a Moderate Buy from a Hold two quarters ago and the price target is moving higher as well. The $123.40 consensus figure is about 18% above the price action and that is not including the safe 1.8% dividend yield. Additionally, Dick’s Sporting Goods is still carrying a strong 29% short interest that could help fuel the rally as the Q3 reporting time draws near. Dick’s Sporting Goods is slated to report Q3 results in late November. 

Starbucks Enters A New Age 

Shares of Starbucks have been trending higher since late summer and look like they may continue moving higher into the end of the year. Incoming CEO Laxman Narasimhan has gotten enough bullish commentary from the analysts that have Starbucks listed as one of Marketbeat’s Most Upgraded Stocks. That trend may continue following the upcoming earnings announcement. The fall weather has pumpkin-flavored everything back on the menu and diehard enthusiasts coming back to the store which is expected to show up on the top and bottom lines. Until then, the consensus rating for Starbucks is a Hold and that is down from a Moderate Buy earlier in the year but offset by a rising consensus price target. The price target of $1.03.50 is 23% above the current price action and up in the 30 and 90 periods. Starbucks will report earnings for Q3 in late October. 

Ulta Beauty Is A Good-Looking Mall Stock 

Ulta Beauty is a largely mall-based retailer but don’t hold it against them. The company’s value offering, prominent store positioning, and eCommerce are driving growth and growing market share while maintaining margins. The Q2 results came out late in the season so the Q3 results won’t come out until early December but the outlook is good. The company beat on the top and bottom line in Q2 and raised the guidance to a level well above the prior consensus figures and this guidance may be cautious. The company is expecting YOY growth to slow to the mid to low-single-digit range by the end of the year in spite of what appears to be clear momentum. In regard to the analyst, the Q2 results sparked 13 positive commentaries including one Initiated  Coverage at Outperform that has the consensus rating and price target trending higher in the 12, 3, and 1-month comparisons. 

Three Consumer Stocks That Could Outperform In Q4 

Should you invest $1,000 in Starbucks right now?

Before you consider Starbucks, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Starbucks wasn't on the list.

While Starbucks currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Consumer Staples Select Sector SPDR Fund (XLP)N/A$76.25+0.1%2.39%N/AN/AN/A
Consumer Discretionary Select Sector SPDR Fund (XLY)N/A$142.63+0.1%0.86%N/AHoldN/A
Ulta Beauty (ULTA)
1.9291 of 5 stars
$448.35+0.2%N/A21.00Moderate Buy$485.71
DICK'S Sporting Goods (DKS)
2.8454 of 5 stars
$121.69+2.3%1.60%10.74Moderate Buy$136.16
Starbucks (SBUX)
2.7624 of 5 stars
$99.56+0.0%2.13%35.31Hold$100.04
Compare These Stocks  Add These Stocks to My Watchlist 

Thomas Hughes

About Thomas Hughes

Contributing Author: Technical and Fundamental Analysis

Thomas got his start with the markets while working as a Chef. In 2005 a chance invitation to attend the seminar “How To Buy And Sell Your Own Stocks” altered his worldview. Soon trading and stocks consumed his every waking moment to the point of excluding all else. Thomas now enjoys a much different lifestyle engaged in his true passion, uncovering great investments.
Contact Thomas Hughes via email at tmhughes.writeon@gmail.com.