E-commerce to Hit Record High This Year: 5 Stocks to Buy
E-commerce has been saving the pandemic-ravaged retail sector. Ever since the coronavirus outbreak, people mostly confined to their homes have taken to shopping online. This has seen e-commerce sales almost doubling year over year.
Per a new survey by eMarketer, U.S. online sales will reach a record high this year. This once again reflects the growing dependence of people on e-commerce companies for all sorts of necessities.
Online Sales Poised to Hit New High
According to eMarketer, U.S. online sales will reach $794.50 billion this year, up 32.4% year over year and accounting for 14.4% of all retail spending. It also expects e-commerce sales to reach 19.2% of all U.S. retail spending by 2024. The increase for 2020 is much higher than the 18% gain predicted in the company’s second-quarter forecast as consumers continue to opt for online shopping amid the pandemic.
Online shopping is so strong that it will more than offset the 3.2% decline in brick-and-mortar spending this year, which will drop to $4.711 trillion, the firm forecasts. As a result, total U.S. retail sales will essentially remain flat.
Retailers Go on Hiring Spree
Retailers have started hiring ahead of the holiday season to manage the rush and ensure on-time delivery. Walmart, Inc. WMT said last month that it will be hiring 20,000 seasonal staff members in the United States to prepare for an expected surge in online shopping ahead of the holidays. This will be Walmart's first large seasonal hiring in five years.
Also, Best Buy, Inc. BBY is looking to hire thousands of new employees for the holiday season at individual stores. The company is holding job fairs to start the process. Other factors too are likely to aid holiday sales this year.
Consumer confidence hit a six-month high in September, reflecting more confidence in the U.S. economy after a summer lull. Also, retail sales rose in September for the fifth straight month, indicating that the economy is on track for record growth in the third quarter after a historic slump in the April-June period.
Our Choices
The domestic economy has started reopening but the government is still struggling to contain the spread of the pandemic. Safety measures like at-home orders and strict social distancing will continue for at least a few more months now. Hence, more people will rely on online delivery, especially for grocery and household staples. Given this situation, it might be prudent to invest in the following four e-commerce stocks.
Walmart Inc. has evolved from being just a traditional brick-and-mortar retailer to an omnichannel player. Walmart’s offerings include almost everything from grocery to cosmetics, electronics to stationery, and home furnishings to health and wellness products among others.
The company’s expected earnings growth rate for the current year is 8.1%. The Zacks Consensus Estimate for current-year earnings has improved 7.5% over the past 60 days. Walmartcarries a Zacks Rank #2 (Buy).
Target Corporation TGT has evolved from just being a pure brick & mortar retailer to an omni-channel entity. The company has been investing in technologies, improving websites and mobile apps, and modernizing the supply chain to keep pace with the changing retail landscape and better compete with pure e-commerce players.
The company’s expected earnings growth rate for the current year is 12.4%. The Zacks Consensus Estimate for current-year earnings has improved 39.4% over the past 60 days. Target sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Kroger Co. KR operates supermarkets, multi-department stores, marketplace stores and price impact warehouse stores. Its combination food and drug stores offer natural food and organic sections, pharmacies, general merchandise, pet centers, fresh seafood, and organic produce; and multi-department stores provide apparel, home fashion and furnishing, outdoor living, electronics, automotive products, and toys.
The company’s expected earnings growth rate for the current year is 49.1%. The Zacks Consensus Estimate for current-year earnings has improved 15.5% over the past 60 days. Kroger has a Zacks Rank #2.
Carvana Co. CVNA is a leading e-commerce platform for buying and selling used cars.The compnay end-to-end business model covers every aspect of used-car retailing.
Carvana’s expected earnings growth rate for the current year is 10%. The company’s shares have advanced 33.6% in the past three months. Carvana has a Zacks Rank #2.
Revolve Group, Inc. RVLV is an e-commerce fashion company. It markets and sells men's and women's designer apparels, shoes and accessories. The company offers jackets, pants, shorts, skirts, sweaters, tops, shoes and jewelry products.
The company’s expected earnings growth rate for next year is 33.3%. Its shares have advanced 6.8% in the past three months. Revolve Group has a Zacks Rank #2.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Target Corporation (TGT) : Free Stock Analysis Report
Walmart Inc. (WMT) : Free Stock Analysis Report
Best Buy Co., Inc. (BBY) : Free Stock Analysis Report
The Kroger Co. (KR) : Free Stock Analysis Report
Carvana Co. (CVNA) : Free Stock Analysis Report
Revolve Group, Inc. (RVLV) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
