The Zacks Analyst Blog Highlights: Mastercard, Sprouts Farmers Market, Wayfair, Tractor Supply and Dollar General

Zacks Equity Research
·6-min read

For Immediate Release

Chicago, IL – June 15, 2020 – announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Mastercard MA, Sprouts Farmers Market, Inc. SFM, Wayfair Inc. W, Tractor Supply Co. TSCO and Dollar General Corp. DG.

Here are highlights from Friday’s Analyst Blog:

Economic Reboot Aids Retail and Commerce in May

Per Mastercard’s latest SpendingPulse report, consumer spending got partially restored in May, courtesy of the gradual reopening of the economy and the relaxation of coronavirus-induced lockdown. American retail sales (ex-auto) dropped 5.6% in May from the year-ago level, reflecting an improvement from the 14.1% decline in April.

Going by the global payment company data, which showcases overall spending trends across all payment types, e-commerce sales soared amid the pandemic crisis, reflecting a surge of 92.7% in May. In both months, e-commerce accounted for 22% of all retail sales, twice the year-ago figure of 11%. Digital sales grew exponentially during the COVID-19 quarantine and incremental spending in excess of $53 billion was registered on e-commerce channels in the last two months in the United States.

In May, online and in-store hardware sales surged 36.2% while furniture sales across all channels were up 7.5%, gaining maximum since August 2018. Demand for grocery remained elevated as well with online and in-store sales recording an uptick of 9.2%. 

If we dig deeper into this data, we will get an insight into the coronavirus impact on consumer behaviour. People are spending more on essentials and shifting to online sales, away from the traditional brick and mortar stores. A similar trend was witnessed in the U.K., where consumer spending on e-commerce and non-discretionary constituted 33% of overall retail sales.

“The shift to digital shopping has been undeniable. Everything else has been incredibly unpredictable,” reckons Steve Sadove, senior advisor, Mastercard. “The question is what changes will stick around for the long term. Investing in your home and shopping local are two recent trends. Heightened demand for touchless services is another, which could have tremendous impact on what stores look like and how they blend their online and brick and mortar footprints.”

The outbreak of COVID-19 created a new landscape for online retailers and e-commerce. While there are many uncertainties looming on the future, retailers that are leveraging technology with strong online presence are likely to survive this unprecedented crisis.    

Our Top Picks

At this stage, we think it is better to invest in consumer-centric stocks with a strong growth potential. We narrowed our search down to five such stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). 

You can see the complete list of today’s Zacks #1 Rank stocks here.

Sprouts Farmers Market, Inc. operates in a highly fragmented grocery store industry with focus on product innovation, emphasis on e-commerce, expansion of private label assortment and enhancement of technology. The company has a trailing four-quarter positive earnings surprise of 37.17%, on average. The company is presently a #1 Ranked player. 

Wayfair Inc., headquartered in Boston, MA, is one of the world's leading online sellers of home products, consisting of furniture and home decor. It operates worldwide through and four other branded websites namely, Joss & Main, AllModern, Birch Lane and Perigold. In the past 60 days, 15 estimates for the current-year earnings moved north for Wayfair. The company presently sports a Zacks Rank of 1. 

Tractor Supply the largest retail farm and ranch store chain in the United States. The company, currently carrying a Zacks Rank #2, offers a wide array of merchandise, such as livestock, pet and animal products, maintenance products for agricultural and rural use, hardware and tools, lawn and garden power equipment, truck and towing products, and work apparel. The Zacks Consensus Estimate for current-year earnings has seen 12 upward revisions in the past 30 days.

Dollar General Corp., based in Goodlettsville, TN, is one of the largest discount retailers in the United States. The company, which is currently a #2 ranked player, offers a wider variety of merchandise including consumable items, seasonal items, home products and apparel. The company has a trailing four-quarter positive surprise of 16.90%, on average.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit information about the performance numbers displayed in this press release.

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Dollar General Corporation (DG) : Free Stock Analysis Report
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Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report
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