Analysts like these consumer stocks, and so do we
The outlook for consumer spending is getting darker, but the bad news is not universal. While some companies are poorly positioned in terms of inflation, rising interest rates and the combined impact on consumer spending, there are others that are not. In some cases, like General dollar (NYSE: DG) i General Mills (NYSE: GIS)companies are positioned to benefit from trends that make consumers seek value while in others, such as Cinemark (NYSE: CNK), the post-COVID bounce is still alive. In all cases, analysts see value in these names and consider it a catalyst for higher stock prices.
Cinemark updated to buy
Just a day later we called the competitor AMC Entertainment (NYSE: AMC) for its potential to deliver highly successful results, Cinemark receives an update and is one that moves the market. Morgan Stanley updated the overweight shares citing a strong lead in returning to viewers ’cinemas. In his opinion, the combined effects reduced the fear and a number of highly successful titles such as Top Gun: Maverick and the latest, Thor: Love And Thunder, make viewers return to theaters en masse. Analyst Benjamin Swinburne also points out that movies are a cheap, countercyclical form of entertainment in this regard, making them a good choice in times of recession.
Morgan Stanley’s overweight rating and a $ 22 target price compare favorably with Marketbeat.com’s consensus on moderate buying and $ 22.80. Morgan Stanley’s target is slightly below consensus, but implies more than a 20% hike and includes a robust Bull Case scenario. Mr. Swinburne used a low multiple to achieve his goal and there is also an opportunity for a multiple expansion. Morgan Stanley believes stocks could rise to the $ 36 level if the film’s trends are as strong as expected, good for another 55% rise above the original target.
Dollar General A good buy for bad weather
Oppenheimer reiterated its Top Pick rating in General Dollar, calling it a winner for good or bad times. Due to its position as a low-end and discount retailer, it is well positioned for growth in good or bad economies. In our opinion, you can even do better in bad times when buyers are downsizing to cheaper brands. Oppenheimer’s rating and target price also compare favorably with the consensus that shares linked to moderate buying have a $ 249 target. Oppenheimer raised its target to $ 275 from $ 240, which is the new high target on Wall Street. The bottom line is that moderate buying sentiment has remained stable over the past year, while the target price has risen. In our view, the consensus and the high price target will continue to increase as the company gains momentum. Executives raised the bar last season and it won’t surprise us if they do it again in early August when the company reports.
General Mills explodes after analyst updates
General Mills appeared after the last earnings report because earnings orientation was positive and analysts liked what they saw. The Consumer Staples company was not only able to overcome the price increases, but there was also organic strength, and both are favoring the good dividend yield of 2.80%. The shares have received no less than 7 major updates or target price increases since the mid-June launch and sentiment is still lagging behind the market. As it stands, Marketbeat.com’s sense of consensus is only Hold with a target price below the current price action, but both have a higher trend. The most recent activity considers the shares to have a reasonable valuation, but we believe it could gain another 12.5% to 15% before the next reporting period.