In 2021, Online Shopping Is Here To Stay

Exhibit 4: Home Furnishing Same Store Sales Estimates Q4 2020 – Q1 2021

Source: I/B/E/S data from Refinitiv

Health and Wellness

Consumers’ homes have been converted into gyms in 2020 as health and wellness continues to be a top priority. Dick’s Sporting Goods (DKS), Hibbett Sports (HIBB) and Vista Outdoor e-commerce (VSTO) sales have all risen in 2020, and their StarMine models are also telling us that this trend might continue into 2021 (Exhibit 5).

Exhibit 5: StarMine Model Scores for Sporting Goods

Source: I/B/E/S data from Refinitiv

The StarMine ARM model is highly predictive of both the direction of future revisions and price movement. All three sporting retailers score a 90 or higher out of a possible 100, suggesting that analysts are likely to revise earnings estimates upward.

What’s more, earnings are of good quality. According to the StarMine Earnings Quality model, these companies score a 96, or higher, out of a possible 100. The high scores suggest that profits could be from sustainable sources. The StarMine Value-Momentum (Val-Mo) model suggests that they also rank in the top decile of all stocks in the region.

Similarly, Nike (NKE) and Lululemon  (LULU) have an impressive StarMine Price Momentum model scores (Exhibit 6). They are both in the top decile and score a 92 or higher, out of a possible 100. Those scores suggest that positive stock price momentum is in these companies’ favor.

Exhibit 6: StarMine Price Momentum Model Scores for Sporting Goods

Source: I/B/E/S data from Refinitiv

Discounters

Finally, the discounters gained a lot of market share in 2020, especially at the expense of the department stores. Target (TGT) alone said market share gains for the first half of 2020 totaled $5 billion. The retailer is expected to continue to do well as analysts polled by Refinitiv are optimistic on its new collaboration with Sephora.

Exhibit 7: Discounter Same Store Sales Estimates Q3 2020 – Q4 2020

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