Stocks

These 15 stocks of retailers are expected to rise up to 97% over the next year

With so many challenges for traditional retailers, investors can be forgiven for giving up on the entire sector. But there is money to be made if you focus on innovative sellers and maybe even on traditional brick-and-mortar retailers that are cleaning up their acts.

Below are two lists of stocks of retailers, broadly defined by FactSet to include specialized companies such as Vroom Inc.
VRM
and Carvana Co.
CVNA,
which sell (and buy) used cars online. The first list includes 15 stocks that analysts expect to rise the most over the next year, and the second list shows companies expected to increase their sales the most over the next two years.

Two retailers that didn’t make either list are Macy’s Inc.
M
and Target Corp.
TGT.
Both are worth watching, although investors with shorter-term horizons may find them pricey.

Shares of Macy’s had nearly doubled for 2021 through last week. The stock popped 20% on Aug. 19, after the company reported a 61% increase in comparable-store quarterly sales from a year earlier, established a quarterly dividend and announced an expanded partnership with WHP Global to sell more Toys ‘R’ Us items in its stores. The stock closed at $22.39 on Aug. 20 — a penny above the consensus 12-month price target among analysts polled by FactSet. Of course, analysts can change their estimates in light of recent news.

Target’s stock is up 49% this year. The company also reported a much-improved second quarter and expanded its partnership with Walt Disney Co.
DIS.
Target’s shares closed at $253.40 on Aug. 20, 10% below the consensus price target of $277.66.

Analysts’ favorite retail stocks

Starting with the Russell 3000 Index
RUA,
there are 124 stocks of companies in retail industries, according to FactSet’s industry group descriptions. These include online retailers such as Amazon.com Inc.
AMZN
and the direct used-auto retailers mentioned above.

Among those stocks, 77 have stock-market values of at least $1 billion, are covered by at least five analysts polled by FactSet and have consensus sales and earnings estimates available through 2023.

Here are the 15 stocks with majority “buy” or equivalent ratings that the analysts believe have the most upside potential over the next year:

Company

Share “buy” ratings

Closing price – Aug. 20

Consensus price target

Implied 12-month upside potential

Vroom Inc.
VRM
67%

$25.02

$49.25

97%

RealReal Inc.
REAL
67%

$12.35

$24.31

97%

Overstock.com Inc.
OSTK
100%

$69.58

$127.60

83%

ChargePoint Holdings Inc. Class A
CHPT
88%

$21.26

$36.00

69%

Group 1 Automotive Inc.
GPI
67%

$159.01

$251.40

58%

Leslie’s Inc.
LESL
75%

$22.59

$32.64

44%

Lithia Motors Inc.
LAD
64%

$328.51

$468.83

43%

IAA Inc.
IAA
90%

$51.71

$72.38

40%

Abercrombie & Fitch Co. Class A
ANF
58%

$38.02

$52.11

37%

Tapestry Inc.
TPR
62%

$40.58

$54.89

35%

Capri Holdings Ltd.
CPRI
61%

$54.33

$72.35

33%

Sonic Automotive Inc. Class A
SAH
56%

$50.25

$65.71

31%

Amazon.com Inc.
AMZN
98%

$3,199.95

$4,164.30

30%

Hibbett Inc.
HIBB
83%

$85.14

$110.67

30%

American Eagle Outfitters Inc.
AEO
64%

$32.37

$41.31

28%

Source: FactSet

You can click on the tickers for more about each company, including business profiles, news coverage and price ratios.

Using the same order, here are sales estimates for the group through 2023:

Company

Expected two-year sales increase

Estimated revenue – 2021

Estimated revenue – 2022

Estimated revenue – 2023

Vroom Inc.
VRM
117%

$3,060

$4,514

$6,652

RealReal Inc.
REAL
65%

$447

$592

$736

Overstock.com Inc.
OSTK
17%

$2,830

$3,186

$3,321

ChargePoint Holdings Inc. Class A
CHPT
175%

$200

$328

$550

Group 1 Automotive Inc.
GPI
11%

$13,480

$14,680

$15,025

Leslie’s Inc.
LESL
14%

$1,342

$1,442

$1,536

Lithia Motors Inc.
LAD
41%

$21,902

$26,515

$30,801

IAA Inc.
IAA
15%

$1,706

$1,781

$1,962

Abercrombie & Fitch Co. Class A
ANF
4%

$3,680

$3,847

$3,841

Tapestry Inc.
TPR
11%

$6,066

$6,531

$6,725

Capri Holdings Ltd.
CPRI
24%

$5,017

$5,752

$6,205

Sonic Automotive Inc. Class A
SAH
34%

$12,390

$14,196

$16,569

Amazon.com Inc.
AMZN
38%

$476,170

$563,466

$657,295

Hibbett Inc.
HIBB
13%

$1,504

$1,581

$1,706

American Eagle Outfitters Inc.
AEO
17%

$4,917

$5,355

$5,742

Source: FactSet

The estimates are for calendar years, but note that many retailers’ fiscal years don’t match the calendar.

Also using the same list, here are estimates for earnings per share through 2023:

Company

Expected two-year EPS change

Estimated EPS – 2021

Estimated EPS – 2022

Estimated EPS – 2023

Vroom Inc.
VRM
N/A

-$2.50

-$2.45

-$2.24

RealReal Inc.
REAL
N/A

-$2.05

-$1.35

-$1.00

Overstock.com Inc.
OSTK
-4%

$2.56

$2.73

$2.46

ChargePoint Holdings Inc. Class A
CHPT
N/A

-$1.23

-$0.42

-$0.23

Group 1 Automotive Inc.
GPI
-19%

$30.30

$28.09

$24.61

Leslie’s Inc.
LESL
16%

$0.85

$0.90

$0.98

Lithia Motors Inc.
LAD
-2%

$33.22

$31.61

$32.59

IAA Inc.
IAA
19%

$2.33

$2.44

$2.76

Abercrombie & Fitch Co. Class A
ANF
-10%

$3.16

$3.18

$2.85

Tapestry Inc.
TPR
22%

$3.17

$3.55

$3.85

Capri Holdings Ltd.
CPRI
53%

$3.93

$5.17

$5.99

Sonic Automotive Inc. Class A
SAH
7%

$7.03

$7.37

$7.52

Amazon.com Inc.
AMZN
74%

$53.15

$67.39

$92.34

Hibbett Inc.
HIBB
13%

$8.89

$8.88

$10.04

American Eagle Outfitters Inc.
AEO
34%

$1.97

$2.33

$2.63

Source: FactSet

For three of the companies, the expected two-year change in EPS is “N/A” because estimated earnings for 2021 or 2023, or both, are negative.

Fastest expected sales increases

Starting again with the 77 retailers that have market capitalizations of at least $1 billion and are covered by at least five analysts polled by FactSet, here are the 15 expected to increase their sales the most over the next two years:

Company

Expected two-year sales increase

Estimated revenue – 2021

Estimated revenue – 2022

Estimated revenue – 2023

ChargePoint Holdings Inc. Class A
CHPT
175%

$200

$328

$550

Vroom Inc.
VRM
117%

$3,060

$4,514

$6,652

Carvana Co. Class A
CVNA
76%

$11,775

$15,468

$20,680

RealReal Inc.
REAL
65%

$447

$592

$736

Revolve Group, Inc Class A
RVLV
47%

$818

$1,004

$1,206

Etsy Inc.
ETSY
47%

$2,280

$2,747

$3,351

Floor & Decor Holdings Inc. Class A
FND
46%

$3,339

$4,007

$4,874

Five Below Inc.
FIVE
41%

$2,717

$3,264

$3,841

Stitch Fix Inc. Class A
SFIX
41%

$2,240

$2,622

$3,161

Lithia Motors Inc.
LAD
41%

$21,902

$26,515

$30,801

Wayfair Inc. Class A
W
39%

$14,393

$17,228

$20,049

Amazon.com Inc.
AMZN
38%

$476,170

$563,466

$657,295

Lululemon Athletica Inc.
LULU
37%

$5,804

$6,877

$7,963

Sonic Automotive Inc. Class A
SAH
34%

$12,390

$14,196

$16,569

Ollie’s Bargain Outlet Holdings Inc.
OLLI
26%

$1,868

$2,088

$2,363

Source: FacSet

Only five companies make both this list and that with the most implied upside potential for their stock price: ChargePoint Holdings Inc.
CHPT,
Vroom, RealReal Inc.
REAL,
Lithia Motors Inc.
LAD,
Amazon and Sonic Automotive Inc.
SAH.

Here are EPS estimates for the list of best expected sales growers, using the same order as those with the fastest expected sales growth:

Company

Expected two-year earnings increase

Estimated EPS – 2021

Estimated EPS – 2022

Estimated EPS – 2023

ChargePoint Holdings Inc. Class A
CHPT
N/A

-$1.23

-$0.42

-$0.23

Vroom Inc.
VRM
N/A

-$2.50

-$2.45

-$2.24

Carvana Co. Class A
CVNA
N/A

-$1.12

-$0.30

$1.70

RealReal Inc.
REAL
N/A

-$2.05

-$1.35

-$1.00

Revolve Group, Inc Class A
RVLV
46%

$1.02

$1.19

$1.49

Etsy Inc.
ETSY
62%

$3.03

$3.52

$4.90

Floor & Decor Holdings Inc. Class A
FND
45%

$2.46

$2.88

$3.56

Five Below Inc.
FIVE
45%

$4.57

$5.60

$6.64

Stitch Fix Inc. Class A
SFIX
N/A

-$0.42

-$0.24

$0.43

Lithia Motors Inc.
LAD
-2%

$33.22

$31.61

$32.59

Wayfair Inc. Class A
W
113%

$3.27

$4.74

$6.97

Amazon.com Inc.
AMZN
74%

$53.15

$67.39

$92.34

Lululemon Athletica Inc.
LULU
50%

$6.73

$8.33

$10.08

Sonic Automotive Inc. Class A
SAH
7%

$7.03

$7.37

$7.52

Ollie’s Bargain Outlet Holdings Inc.
OLLI
23%

$2.93

$3.24

$3.61

Source: FactSet

Here’s a summary of analysts’ opinion about the list of best expected sales growers, also in the same order:

Company

Share “buy” ratings

Closing price – Aug. 20

Consensus price target

Implied 12-month upside potential

ChargePoint Holdings Inc. Class A
CHPT
88%

$21.26

$36.00

69%

Vroom Inc.
VRM
67%

$25.02

$49.25

97%

Carvana Co. Class A
CVNA
58%

$349.76

$379.09

8%

RealReal Inc.
REAL
67%

$12.35

$24.31

97%

Revolve Group, Inc Class A
RVLV
71%

$57.68

$70.67

23%

Etsy Inc.
ETSY
76%

$199.27

$215.93

8%

Floor & Decor Holdings Inc. Class A
FND
87%

$117.75

$136.36

16%

Five Below Inc.
FIVE
67%

$225.11

$232.70

3%

Stitch Fix Inc. Class A
SFIX
38%

$39.71

$62.13

56%

Lithia Motors Inc.
LAD
64%

$328.51

$468.83

43%

Wayfair Inc. Class A
W
50%

$290.52

$324.64

12%

Amazon.com Inc.
AMZN
98%

$3,199.95

$4,164.30

30%

Lululemon Athletica Inc.
LULU
67%

$397.83

$401.63

1%

Sonic Automotive Inc. Class A
SAH
56%

$50.25

$65.71

31%

Ollie’s Bargain Outlet Holdings Inc.
OLLI
50%

$82.70

$98.00

19%

Source: FactSet

If you see any stocks of interest here, you should do your own research and form your own opinion about the companies’ long-term strategies before considering an investment.

Don’t miss: These stocks can defend your investment portfolio from inflation

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