Amid mounting global challenges, it's essential to savor the lighter aspects of life. History shows a bullish trend during the holiday-shortened Thanksgiving week, fueled by increased consumer spending, the surge in holiday travel, and a lower cost of Thanksgiving spread.
Retailers anticipate robust sales during the festive week to turn over a profit for the year. Consequently, they offer discounts and attractive deals on overstocked items, seasonal goods, high-priced commodities, and holiday decor and gifts. Over the past decade, the retail sector has consistently surpassed the S&P 500 during this time frame.
2023 is predicted to witness a record-breaking holiday expenditure during November and December, indicating growth between 3% and 4% over 2022, snowballing the total spent from $957.3 billion to an estimated $966.6 billion. A 2023 Deloitte holiday survey suggests consumers are projected to spend an average of $1,652 during this holiday season, exceeding the pre-pandemic spending levels.
Despite witnessing a dip in October – its first in seven months – U.S. retail sales are expected to rebound. Despite economic uncertainties pressurizing customers, they prioritize holiday expenses during this year's shopping season and are looking for attractive deals and promotions to guide their expenditures.
Approximately 90% of shoppers planning to shop during the Thanksgiving break aim to visit a store to make purchases or collect an online order, with 84% planning to shop online.
Auto manufacturers were grappling amid the United Auto Workers strike. After successful negotiations with General Motors, October 30, 2023 marked the end of the strike. Kelley Blue Book reports that many car dealerships hoarding new vehicles due to fears of scarcity are currently dealing with an oversupply. The average dealership now boasts a 67-day supply of vehicles, although certain brands are still coping with undersupply. The swing in supply could generate lucrative deals for the holiday season.
The airline industry is bracing for the imminent holiday season, expecting record passenger volumes. The Transportation Security Administration projects a staggering 30 million passengers to be screened, potentially setting a new travel record. The pinnacle of this busy stretch is expected to be the Sunday following Thanksgiving, with approximately 2.9 million air travelers anticipated.
According to the Federal Aviation Administration, Thanksgiving flights could peak at 49,606 on the preceding Wednesday – a significant rise compared to last year's all-time high of 48,192. Many airlines are adequately prepared for severe weather conditions, having learned lessons from the previous year when they were compelled to cancel thousands of flights across the country due to adverse weather.
Thanksgiving continues to defy economic headwinds like rising inflation and dwindling consumer savings. Understanding the holiday's implications goes beyond recognizing it as a time for feasting and expressing gratitude; it is also crucial to comprehend its effects on stock market trends.
In the weeks leading up to Thanksgiving, the stock market traditionally experiences more substantial activity as traders recalibrate their strategies. Historically, the S&P 500 has closed the week on an optimistic note three-quarters of the time since 1961, with a median gain of 0.3%.
Furthermore, the S&P 500 has posted positive figures for the week two-thirds of the time, presenting investors with a median gain of 0.75%. Notably, amid the 2008 Global Financial Crisis, the S&P 500 reported an impressive 12% profit during Thanksgiving week.
This article will delve into the influence of Thanksgiving on various sectors like food, beverage, auto, e-commerce, and travel stocks. The seven stocks that could benefit from the holiday week are discussed below:
E-commerce behemoth AMZN is primed to reshuffle the deck of the festive commerce landscape. With a soaring 71.3% year-to-date gain, the company's performance deserves praise. The most recent earnings report depicts an impressive 12.6% revenue surge, hitting a staggering $143.08 billion. AMZN's efforts have been focused on more than just following the market trend, but indeed establishing it.
Market murmurs reflect the awe inspired by the company. Its impressive market cap exceeding $1.48 trillion, coupled with an energetic average volume of 52.49 million, reveals the momentum of AMZN this Thanksgiving.
In a period blossoming with high consumer activity, hundreds of millions of goods are purchased from AMZN. Thus, the company’s fourth-quarter results will provide Wall Street with a comprehensive snapshot of the festive shopping season.
Analysts expect AMZN’s revenue to increase 11.2% year-over-year to $165.85 billion, while EPS is expected to be $0.76, up significantly year-over-year.
Monster Beverage Corporation (MNST)
The Corona, California-based energy drink provider MNST maintains a consistent demand for its beverages, unfazed by frequent price uplifts. The third quarter’s profit surpassed expectations, catalyzed by increased energy drinks and hard seltzers prices.
A decrease in freight and aluminum can costs from the peaks experienced during COVID-19 has inadvertently facilitated the elevation of previously pressured margins.
As of May 2022, MNST beverages have reached the list of top-selling energy drinks in America. The company's momentum will likely persist as a dynamic array of product launches is forecasted to encourage stable growth. A profound distribution network across international markets and a focus on expanding opportunities bode well for future gains.
Bolstered by robust demand trends, sound pricing strategies, and continuous product development, MNST's resilience stands firm. Net sales for the 2023 third quarter increased 14.3% to $1.86 billion. Analysts expect MNST’s revenue and EPS to increase 16.3% and 36% year-over-year to $1.76 billion and $0.39, respectively.
2023 is shaping to be a benchmark year for car consumers seeking year-end deals. An unprecedented converging scenario involving elevated inventory levels, significantly increasing interest rates, and traditional holiday discounts is navigating toward big discounts.
Annually, the holiday season witnesses an eruption of optimum offers from car dealerships. Conscious that consumers are more inclined to spend during the festive season, automakers and dealerships deliver enthralling promotions, markdowns, and exclusive deals.
Consequently, after years of observing these seasonal conventions, buyers expect bountiful year-end car discounts, often holding back on purchases until December to avail of them.
For November, GM offers notable cash rebates on various 2023 models. Buyers can expect up to $4,000 off the GMC Sierra 1500 and $3,500 off the Silverado 1500. On average, a rebate of around $1,500 is currently on offer across all GM models.
This tactic could pivotally steer the Detroit-based auto giant's fortunes upward as we enter the holiday season. Amid these developments, for the fiscal quarter ending December 2023, analysts expect GM’s revenue and EPS to be $39.58 billion and $0.97, respectively.
As Americans traverse the nation to unite with their families during the Thanksgiving season, the holiday is anticipated to act as a definitive marker for the aviation industry's capacity to navigate the year-end festivity period despite facing hurdles of sustained deficit of air traffic controllers.
DAL, bolstered by its strong position, is primed to capture a sizable share of this travel surge. Boasting one of the most comprehensive domestic route networks within the continental U.S., DAL is optimally set up to accommodate these customers.
Being one of the four major carriers dominating over 60% of the U.S. aviation market, DAL persistently demonstrates robust bookings – a trend spearheaded by its premium offerings, which significantly eclipsed the main cabin reservations in recent quarters. Catering to premium passengers has successfully insulated DAL from some of the financial strains budget airlines have faced recently.
DAL projects to witness between 6.2 million to 6.4 million passengers this Thanksgiving, an increase of 5.7 million passengers the airline accommodated last year and is anticipated to surpass the 6.25 million passengers transported in 2019.
DAL emerges as a promising prospect for investors weighted towards capitalizing on dwindling oil prices and the future supply chain improvement. These factors stand to positively impact profit margins within the aerospace industry down the line.
For the fiscal quarter ending December 2023, analysts expect DAL’s revenue is expected to increase 3.9% year-over-year to $13.96 billion, while EPS is expected to be $1.14.
With over $20 billion in market cap, EBAY, an established e-commerce heavyweight, is tirelessly striving to attract its consumers' interest and spending power. Customers seeking automotive necessities, smartwatches, and Apple products can reap the benefits of up to 75% discount by commencing their shopping endeavors with EBAY this holiday season.
EBAY constantly refines its strategies to uphold its preeminence in an industry characterized by relentless evolution and revolution. As the holiday season looms, its performance is under intense scrutiny as never before, making its sales forecast a widely watched indicator in the e-commerce landscape.
For the fiscal quarter ending December 2023, analysts expect EBAY’s revenue and EPS to be $2.51 billion and $1.02, respectively.
CAG, a leading North American food company, stands to gain as the anticipated cost of this year's Thanksgiving meal is set to decrease.
American Farm Bureau Federation survey has revealed that the average expense of a conventional Thanksgiving dinner for 10 people in 2023 will be roughly $61.17, or under $6.20 per individual. This reduction is largely attributed to a 5.6% year-over-year decrease in turkey prices and notable reductions in the whipping cream and cranberries prices by 22.8% and 18.3%, respectively.
The declining grocery costs could lead to a sales uptick for CAG this festive season.
Moreover, preparing a Thanksgiving dinner also encompasses multiple stressors, including shopping, planning, and the actual cooking process. However, CAG's sophisticated meal-kit delivery service can eliminate two primary pressure points.
By delivering all the necessary pre-portioned and prepared ingredients required to prepare a mouthwatering meal directly to the customer's doorstep, CAG offers a solution for consumers to enjoy a stress-free holiday season.
For the fiscal quarter ending November 2023, analysts expect CAG’s revenue and EPS to be $3.25 billion and $0.68, respectively.
United Airlines Holdings, Inc. (UAL)
UAL anticipates a record-breaking surge in travelers this Thanksgiving holiday season, projecting significant revenue growth. The holiday travel period, defined as November 17 to November 29, sees the airline expecting to serve over 5.9 million passengers. This indicates a roughly 5% rise compared to 2019 and a significant 13% increment from last year's figures.
UAL plans to operate an average of over 3,900 daily flights to manage the increased traffic, translating to approximately three departures per minute. Therefore, the airline has introduced over 550,000 seats to accommodate high passenger volumes.
UAL attributes its heightened demand to the success of its basic economy pricing option. This economical ticket option allows UAL to compete effectively against rival ultra-low-cost carriers.
UAL’s third-quarter revenue from its basic economy rose 50% annually. UAL’s CEO Scott Kirby credits this substantial gain to the company’s “improved product.”
For the fiscal quarter ending December 2023, analysts expect UAL’s revenue is expected to increase 9.5% year-over-year to $13.58 billion, while EPS is expected to be $1.69.
