As the second quarter earnings season ends, a recurring theme for many companies that rely on the discretionary income of consumers is the health (or lack thereof) of the consumer. This is particularly noticeable to investors in the performance of consumer discretionary stocks.
These companies are especially sensitive to price pressures. In 2021 and 2022, they could pass along much of their producer prices to the consumer. But in 2023, and particularly in 2024, consumers have started to pull back on these more expensive “nice to have" purchases. That's reflected in weak guidance, which has some of these stocks heading toward 52-week lows.
This is where the opportunity lies for opportunistic investors. The Federal Reserve has all but confirmed that it will lower interest rates at its September 2024 meeting. While it may take some time for the effects of that cut to reach the consumer, quality consumer discretionary stocks that are trading at a discount are likely to be among the strongest performers. Here are seven names to consider.
Click the "Continue to Slide #1" button to view the first company.
