The holiday shopping season is upon us, and our retail stocks are well-positioned to thrive, according to Wall Street research firm Telsey Advisory Group. The news In a note to clients this week, the retail-focused firm labeled Amazon , Costco , Best Buy , and TJX Companies as among the companies best positioned versus their peers this holiday season. Telsey Advisory expects value-seeking to be a key theme among shoppers this year, which puts companies with reputations for good deals on solid ground. Overall, the firm expects holiday retail sales up between 3% to 3.5% this year, compared with 4.6% growth last year and a 5.4% increase in 2022. Analysts identified top picks by retail sector, from online to specialty apparel and so on. The firm has a buy-equivalent outperform rating on all four Club stocks. Amazon is Telsey Advisory’s pick among online retailers as consumers prioritize a more convenient shopping experience through the Prime membership. In general, analysts see direct-to-consumer sales being a bright spot this holiday season, fueled by a wide product selection that is priced competitively and delivered at increasingly quick speeds. “Amazon should continue to lead the race,” analysts wrote, noting that its October discount event for Prime members helped capture early holiday shopping dollars. Although Telsey Advisory’s note came out before Amazon’s earnings report Thursday night , the company’s guidance for the quarter backed up analysts’ optimism. Analysts tapped Costco as one of their two favorites in the discounter and warehouse clubs category ( Walmart is the other). The firm is upbeat on warehouse clubs generally, predicting holiday sales growth of 7% versus 5.5% in the year-ago period, “primarily driven by a defensive product mix of consumables and value-focused discretionary items that should attract consumers in a tight income environment.” Costco has had a good year so far, and that should continue in the final months of 2024, Telsey Advisory argued. Best Buy will stand out in the hardlines category, which covers items like electronics, appliances and furniture, Telsey Advisory argued. Analysts predict consumer electronic sales will decrease 3% year over year in 2024, but that is actually an improvement from last year’s 7.9% decline as demand bottomed after a sales acceleration during the Covid-19 pandemic. Most crucially, the firm argues Best Buy is poised to gain market share in electronics retail thanks to offering the “full range of the latest technology products,” such new AI-powered laptops, and its strength in e-commerce. Although Best Buy’s same-store sales may be about flat, Telsey Advisory expects a stabilization to begin as the replacement cycle for pandemic-era purchases takes shape. TJX Companies is the firm’s off-price retailer of choice as consumers across the income spectrum are trading down to cheaper merchandise that the company offers. The T.J. Maxx parent’s value-oriented offering for the family and…
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