Highlights from Zacks analyst blog: Tapestry Inc., Ulta Beauty, Inc. Target Corp. and Costco Wholesale Corp

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Chicago, IL – January 6, 2022 – Zacks.com announces the list of stocks featured on the Analysts Blog. Every day, Zacks Equity Research analysts discuss the latest news and events impacting stocks and financial markets. Stocks recently featured in the blog include: Tapestry Inc. TPR, Ulta Beauty, Inc. ULTA Target Corp. TGT and Costco Wholesale Corp. COST.

Here are highlights from Wednesday’s analyst blog:

4 S&P 500 retail stocks that look solid bets for 2022

After wrapping 2021 with big gains, Wall Street started the new year on a strong note. Investors are betting on a sustained economic recovery and remain optimistic about the business outlook despite concerns over the coronavirus and inflation. Impressively, the S&P 500 Index hit a 52-week high of 4,818.62 on January 4, 2022. Clearly, increasing investor risk appetite and overall monetary policy should help the market show the fourth consecutive year of positive returns in 2022.

A famous saying goes: “Like January, so is the year”.

Given the New Year’s euphoria on Wall Street, some market experts believe rising vaccination rates, easing supply pressures, rising wages and increasing spending consumption coupled with pent-up demand will further increase equity gains. Looking at the calendar year picture for the S&P 500 Index, earnings are expected to rise 8.7% from 7.4% higher earnings in 2022, according to the latest Zacks Earnings Outlook article.

Meanwhile, the Federal Reserve has raised its real GDP forecast for 2022 to 4%, from 3.8%. The Fed led by Jerome Powell is now forecasting an unemployment rate of 3.5% in 2022, down from the previous estimate of 3.8%. It is clear that a favorable economic context bodes well for the Retail-Wholesale sector. The outlook for the sector is correlated with the purchasing power of consumers. Consumer spending, which is a key driver of the economy, has been strong.

According to the earnings outlook article, the retail and wholesale industry is expected to grow 7.2% year on year, with net income expected to increase 13% in 2022. Impressively, the industry currently holds a rank 2 in the Zacks sector. and occupies a position in the top 13% of the list of 16 Zacks sectors.

That said, here we have highlighted four stocks from the retail and wholesale sector that are either Zacks # 1 (strong buy) or 2 (buy) and are poised to help the S&P 500 index hit. new heights. You can see The full list of today’s Zacks # 1 Rank stocks here.

4 important choices

Tapestry, Inc., the supplier of luxury accessories and branded lifestyle products, is a potential choice. The company benefited from the successful execution of the acceleration program. The program aims to transform the company into a leaner and more responsive organization. He intends to develop significant data and analytics capabilities, focusing on improving digital and omnichannel capabilities and operating with a clearly defined path and strategy for each of his brands, namely Coach , Kate Spade and Stuart Weitzman.

Tapestry has averaged a 29% surprise over the past four quarters. This Zacks Rank # 1 company has an estimated long-term profit growth rate of 12.3%. Zacks’ consensus estimate for Tapestry sales for the current year and next year suggests growth of 14.8% and 4.8%, respectively, from a year ago.

We suggest you invest in Ulta Beauty, Inc. The company has strengthened its omnichannel business and explored the potential of the physical and digital facets. He has implemented various tools to improve the customer experience, such as offering a virtual test tool and in-store training, and reinventing devices, among others. Ulta Beauty is focused on providing its customers with an organized and exclusive line of beauty products through innovation.

Impressively, this beauty retailer and the # 1 beauty destination for cosmetics, perfumes, skin care products, hair care products and salon services has an average surprise of 76% on the last four quarters. This Zacks Rank # 1 company has an estimated long-term profit growth rate of 16.5%. Additionally, Zacks’ consensus estimate for current and upcoming year sales of Ultra Beauty suggests growth of 39.8% and 6.9%, respectively, from a year ago.

Target Corp. is also a solid bet. The company has invested to improve omnichannel capabilities, develop new brands, renovate stores and expand same-day delivery options to provide a seamless shopping experience for customers. Notably, this general merchandise retailer has made a number of changes to its business model to fit and stay relevant in the ever-changing retail landscape.

Impressively, Target has a surprise earnings surprise for the past four quarters of 19.7%, on average. This Zacks Rank # 2 company has an estimated long-term profit growth rate of 14.4%. Zacks’ consensus estimate for Target sales for the current fiscal year and next fiscal year suggests growth of 13.9% and 2.3%, respectively, compared to the prior year period.

You can invest in Costco Wholesaler Corp. The company’s growth strategies, better pricing management, decent membership trends, and increasing penetration of e-commerce businesses have contributed to its performance. Cumulatively, these factors have helped this member warehouse operator achieve an impressive number of comparable sales. Costco quickly embraced the omnichannel mantra to deliver a seamless shopping experience, whether online or in-store.

Costco has a surprise earnings for the last four quarters of 8.3%, on average. This Zacks Rank # 2 company has an estimated long-term profit growth rate of 8.8%. Zacks’ consensus estimate for Costco’s sales for the current year and next year suggests growth of 10.7% and 7.6%, respectively, from the previous year.

Zacks Top 10 stocks for 2022

In addition to the investment ideas discussed above, would you like to know our top 10 picks for all of 2022?

From its creation in 2012 until November, the Top 10 Zacks stocks gained an impressive + 962.5% versus + 329.4% for the S&P 500. Now our research director combs through the 4,000 companies covered by the Zacks rankings to select the top 10 tickers to buy and hold . Don’t miss your chance to participate in these actions when they release on January 3.

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Past performance is no guarantee of future results. The potential for loss is inherent in any investment. This material is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold any security. No recommendation or advice is given as to whether an investment is suitable for a particular investor. It should not be assumed that any investment in any identified and described securities, companies, sectors or markets was or will be profitable. All information is current as of the date hereof and is subject to change without notice. The views or opinions expressed may not reflect those of the company as a whole. Zacks Investment Research does not engage in investment banking, market making or securities asset management activities. These returns come from hypothetical portfolios made up of stocks with a Zacks rank = 1 that have been rebalanced monthly without any transaction costs. These are not the returns of actual equity portfolios. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for more information on the performance numbers displayed in this press release.

Zacks Top 10 stocks for 2022

In addition to the investment ideas discussed above, would you like to know our top 10 picks for all of 2022?

From its creation in 2012 until November, the Top 10 Zacks stocks gained an impressive + 962.5% versus + 329.4% for the S&P 500. Now our research director combs through the 4,000 companies covered by the Zacks rankings to select the top 10 tickers to buy and hold . Don’t miss your chance to participate in these actions when they release on January 3.

Be the first in the new Top 10 stocks >>

Click to get this free report

Target Corporation (TGT): Free share analysis report

Costco Wholesale Corporation (COST): Free Inventory Analysis Report

Ulta Beauty Inc. (ULTA): Free Stock Analysis Report

Tapestry, Inc. (TPR): Free Stock Analysis Report

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