3 Consumer Stocks to Snatch Up While the Market Snoozes

Stocks to buy

Japanese bank Mizuho recently issued a note on consumer stocks that’s mostly in-line with my own positive view on the sector. Specifically, the bank is upbeat on consumer names because of “The underpinnings of healthy employment and real wage growth.” Moreover, Mizuho noted that multiple measures of consumer spending have been improving. Indeed, U.S. retail sales rose a strong 0.6% in February versus January. And 2.1% compared with February 2023 to $700 billion. Moreover, consumers should get a lift from the forecast decline of interest rates later this year. If they start to come down, autos and houses should become much cheaper for consumers, freeing up considerably more funds for other endeavors. With all this in mind, here are three consumer stocks to buy.

O’Reilly Automotive (ORLY)

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Auto parts retailer O’Reilly Automotive’s (NASDAQ:ORLY) top and bottom lines are being boosted by the fact that the average age of American vehicles have reached record-setting levels. Given the relatively high prices of new vehicles, the trend is likely to continue for the foreseeable future.

Also noteworthy is that Japanese bank Mizuho identified ORLY stock as one of its “Buy” rated names in the consumer sector.

And last quarter, ORLY’s revenue climbed 5% year-over-year to $3.8 billion, while its EPS zoomed up 11% year-over-year to $9.26.

Amazon (AMZN)

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A fairly little-noticed recent news item greatly enhanced my view of Amazon (NASDAQ:AMZN) and led me to finally pull the trigger on buying AMZN stock. Specifically, Eli Lilly (NYSE:LLY), one of the world’s largest drugmakers, agreed to sell its medicine through Amazon Pharmacy.

I’ve long-believed that selling drugs can become a huge, needle-moving business for Amazon. That’s because the firm has the ability to cut out the useless middlement, pharmacy benefit managers, and sell drugs with much less overhead. As a result, Amazon can offer drugs to consumers at much cheaper prices than under the current status quo, so the firm should be able to quickly gobble up market share in the space. The firm’s deal with Eli Lilly indicates that it’s making a great deal of progress in the pharmacy sector.

Also noteworthy, in February the revenue of non-store retailers, jumped 7.7% versus February 2023. And of course the online-retail space is dominated by AMZN.

The firm’s huge, positive catalysts make it one of the best consumer stocks to buy.

Netflix (NFLX)

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Netflix (NASDAQ:NFLX) has become the clear, runaway leader of the streaming space. And consequently, it has become well-loved by many Street analysts.

Investment bank Evercore, for example, wrote on March 13 that NFLX can recruit more customers in America and elsewhere, thanks partly to its ad tier. Moreover, the bank thinks that the company’s new initiative of charging consumers to share the service with those outside their households will work well overseas. Evercore increased its price target on the name to $640 from $600 and kept an “outperform” rating on the shares.

Meanwhile, another investment bank, Oppenheimer, expects the company’s average revenue per customer to rise this year as its efforts to thwart password sharing continue and more of its customers join its lucrative ad tier. Oppenheimer increased its price target on the name to $725 from $615. And, like Evercore, also maintained an “outperform” rating on the shares.

On the date of publication, Larry Ramer held a long position in AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM. You can reach him on Stocktwits at @larryramer.

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