Besides Everything In Big Stores, These 'Winner Stocks' Are Also Must-get For Your 'Black Friday Shopping'

In light of ongoing discussions about high inflation and increasing borrowing costs, the skepticism surrounding retail stocks is understandable. Yet, the recent success of Black Friday and Cyber Monday sales might be signaling a change in the narrative, catching the bears off guard.

Despite the financial strain on many Americans, this year's Black Friday and Cyber Monday are still expected to create one of the biggest shopping events, and benefit certain retail stocks.

Best Buy (BBY)

Best Buy, a consumer electronics retailer, saw benefits from the retail rebound in the early years of the pandemic. However, 2022 painted a different picture with inflation dampening demand for non-essential items. As consumers adjusted to the new economic reality, BBY has reemerged as an attractive retail stock. Despite a consensus hold rating and an average price target of $72.62, indicating a slight downside, BBY's recent 11% gain in the past month is noteworthy.

Fintel's options flow screener, which tracks significant transactions from institutional traders, reveals that large entities have been selling calls, particularly the Jan 19 '24 75.00 Call, which could be a risky bet for bulls as BBY's current price of $73.42 suggests it's poised for further gains.

Target (TGT)

Target, a leading big-box retailer, faced challenges earlier this year, with organized retail crime casting a shadow over its operations. However, TGT may now be a retail stock to consider, with a moderate buy rating and a $151.04 price target, suggesting a 12% increase. Despite mixed analyst opinions and a year-to-date decline, TGT's 21% surge in the past month, following a strong Q3 earnings report, is impressive. Options flow data indicates that some significant players remain bearish, particularly on the Dec 29 '23 130.00 Call, which could backfire given TGT's current price near $135.

Five Below (FIVE)

Five Below, a chain of specialty discount stores presents a compelling case for investment due to its relevance in the current economic climate. It offers a wider product range than typical dollar stores, up to $5, attracting a broader customer base. While FIVE has a strong buy consensus, the average price target of $216.92 suggests a modest upside. However, with a 13% gain in the past month, FIVE is emerging as one of the winners of the Black Friday rush.

Williams-Sonoma (WSM)

Williams-Sonoma, a retailer of high-end kitchenware and home furnishings, is typically well-positioned to weather economic downturns due to its affluent customer base. This year, WSM has seen a remarkable 72% increase, contrasting with the average hold rating and a $166.29 price target, which shows a potential 15% decline. Nevertheless, with a 28% rise in the past month, WSM is defying bearish predictions, especially regarding the Feb 16 '24 185.00 Call, which could be a significant loss for bears.

Kimco (KIM)

Kimco, a REIT focusing on grocery-anchored shopping centers, is well-positioned for shifts in consumer spending. Despite some negative sentiment, KIM's recent acquisition and 8% gain in the past month make it an intriguing retail stock. The sale of Jan 19 '24 20.00 Call options last Friday, with KIM trading at $19.90, seems unwise given its upward trajectory, now at $20.05. KIM's forward dividend yield of 4.79% also makes it a holiday stock to ponder.

Nordstrom (JWN)

Nordstrom, a department store giant, seemed doomed by inflation and rising interest rates. However, its Q3 earnings report, with EPS of 25 cents versus an expected 12 cents, has turned the tide. Wall Street's positive reaction has pushed JWN up over 11% in the past month. Despite a hold rating and a $15.73 price target, suggesting a 3% downside, bulls are eyeing the Jan 19 '24 15.00 Call, which could be a significant loss for bears as JWN trades above $16.

Macy's (M)

Macy's, another iconic department store, also benefited from the retail rebound but faced a slowdown in 2021 due to inflation. However, with a 15% loss this year, M's recent performance has been remarkable, jumping 15% in the past five sessions and returning 37% in the past 30 days. Its Q3 earnings report, improved margins, cost cuts, and reduced inventory have attracted institutional investors. Bears, however, have sold calls, particularly the Jun 21 '24 13.00 Call, which could be a mistake given M's price is above $17 and there are no signs of deceleration.

In general, these stocks could be attractive destination for Thanksgiving investments, because every one of them has shown resilience and potential for growth, which make them noteworthy in the current retail landscape.