S&P 500 Rises, While One Sector 'Falls Alone'...Wall Street: "12 Consumer Discretionary Stocks Have 25% Growth Opportunity"

▲ US Stocks, Consumer Discretionary/AI Generated Image

Although the S&P 500 index rose 10.1% this year, the consumer discretionary sector was the only one left out of the rally. Wall Street analysts assessed that even amid the sector's sluggishness, 12 stocks still have at least 25% upside potential. Among them, Las Vegas Sands recorded the highest expectation at 48%.

According to the US economic news outlet MarketWatch on July 7 (local time), among the 11 sectors of the S&P 500, only the consumer discretionary sector declined this year. Although stock prices showed weakness, the estimated earnings per share for the next 12 months increased by 8% this year. The sector's estimated price-to-earnings (P/E) ratio was 27.4x, the highest among S&P 500 sectors.

The overall estimated P/E ratio for the S&P 500 decreased from 22.2x at the end of last year to 20.6x. During the same period, the estimated earnings per share for the next 12 months increased by 19%. Among the 11 sectors, the estimated P/E ratios for 6 sectors declined, with the information technology and energy sectors seeing the largest drops.

Amazon.com (AMZN), the largest company in the consumer discretionary sector, has a market capitalization of $2.62 trillion. Its estimated P/E ratio is 26x, which is below the sector average of 27.4x. The estimated compound annual growth rate (CAGR) for sales from 2026 to 2028 is 13.7%, significantly exceeding the sector's overall forecast of 7.7%.

MarketWatch screened 47 consumer discretionary stocks compiled by FactSet, selecting companies where more than two-thirds of analysts issued a 'buy' rating and had an upside potential of 25% or more based on their price targets. Las Vegas Sands (LVS) was projected to have a 48% upside, Hasbro (HAS) 45%, and Wynn Resorts (WYNN) 44%. Ulta Beauty (ULTA) was 40%, AutoZone (AZO) 34%, and O'Reilly Automotive (ORLY) and DoorDash (DASH) each had 32%.

Aptiv PLC (APTV) was projected for 31%, Amazon 30%, and Carnival Corporation (CCL) 27%. Chipotle Mexican Grill (CMG) and General Motors (GM) each had 26%. MarketWatch selected 12 stocks from the consumer discretionary sector, which was left behind in this year's market rally, based on analysts' buy recommendations and price targets.

[Article Key Summary]

-The S&P 500 rose 10.1% this year, but among the 11 sectors, only the consumer discretionary sector declined.

-Based on FactSet data, 12 stocks were selected where more than two-thirds of analysts issued a 'buy' rating and had an upside potential of 25% or more.

-Las Vegas Sands was projected for 48%, Hasbro 45%, Wynn Resorts 44%, and Ulta Beauty 40% upside potential.

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