In the ever-evolving landscape of investing, wagering on the best consumer stocks to buy is critical, particularly when maneuvering through market fluctuations. The allure of consumer stocks lies in their resilience, as these stocks retain demand despite economic headwinds.
Nevertheless, it’s paramount to pick stocks that meld cyclical appeal with the steadfastness of consumer businesses. This balanced approach mitigates risks while capitalizing on potential rewards. By committing to consumer stocks over time, investors stand to witness substantial growth in their portfolios. With that said, here are three that fit the bill.
Celsius Holdings (CELH)
Functional-beverage provider Celsius Holdings (NASDAQ:CELH) is poised for a massive increase in its top line due to its ambitious global expansion. The company plans to launch in Canada, the U.K., and Ireland, building on its impressive international footprint. Partnering with PepsiCo (NASDAQ:PEP) as the exclusive distributor of its products in Canada, CELH is effectively tapping into Pepsi’s vast network and influence.
Moreover, CELH shares have skyrocketed, boasting a 174.87% increase over the last year. Its year-over-year (YOY) revenue growth stands at a jaw-dropping 101.65%, trumping the sector median at 4.25%. Also, its levered free cash flow (FCF) margin of 8.73% comfortably blows past the industry average of 5.11%, showcasing its standout financial performance and strategic prowess.
Furthermore, fueling optimism, TipRanks analysts have assigned a ‘strong buy’ rating to CELH, anticipating a 5% upside potential with an average price target of $90.20. Hence, the positivity surrounding the company is a testament to its promising trajectory toward continued growth and market domination.
Target (TGT)
Target (NYSE:TGT) captivates a diverse customer base and covers a myriad of segments, including household goods, apparel, electronics and groceries. The company has held up remarkably well due to its robust supply chain, diverse product range and competitive pricing strategies.
This is shown by its stellar fiscal fourth quarter (Q4) results, where TGT exceeded expectations, with its adjusted EPS at $2.98, a 57.6% bump YOY. It experienced a healthy 13.6% growth in same-day services like in-store pickup, Drive-up and Shipping, illustrating the company’s commitment to meeting consumer preferences for convenience and efficiency. Moreover, TGT rejuvenated its loyalty program, Target Circle, integrating a paid membership featuring unlimited free same-day delivery.
Amidst this backdrop of financial triumph, central to TGT’s ascendancy is its effective cost management, marked by a declining trend in freight expenses. Its commitment to streamlining supply chain logistics continues to bear fruit, with its bottom line holding up with its historical averages. Consequently, Quant analysts unanimously confer a ‘buy rating’ on Target, signaling strong confidence in the company’s future trajectory.
Vita Coco Company (COCO)
Beverage giant Vita Coco Company (NASDAQ:COCO) emerges as another standout consumer-stock pick, with an eye-watering market cap exceeding $1.45 billion. The company wrapped up an impressive 2023, posting double-digit revenue growth in each of the four quarters. Similarly, it bested bottom-line estimates with considerable aplomb in each of the four quarters last year. Consequently, COCO’s stock price has seen a remarkable surge of 53% year over year.
It posted its Q4 results recently, reporting GAAP EPS of 11 cents, surpassing expectations by 4 cents. Additionally, its revenue climbed to $106.14 million, marking a 15.4% increase from the previous year and exceeding forecasts by $6.91 million. Additionally, investors should be in for another earnings surprise in the upcoming quarter, with five out of seven Seeking Alpha analysts positively revising their EPS forecasts in the past 90 days.
Consequently, TipRanks analysts have tagged COCO with a ‘strong buy’ rating, pointing to a 14% upside potential. The average price target is an appealing $29.20, underscoring COCO’s bright prospects in the burgeoning beverage industry.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines
