These retail stocks are cheap as economy shows signs of strength

**Retail Stocks Trading at a Discount: Etsy, Target, and Ulta Among the Stocks to Watch**

The economy is showing signs of resiliency which presents an opportunity for investors in the retail industry. CNBC Pro identified several retail stocks trading at a discount to the industry average using FactSet data. The criteria used included an average rating of buy or overweight, upside to average price target of at least 30%, and a market cap of $500 million or more. Stocks that made the cut include Etsy, Target, and Ulta Beauty.


Etsy trades at a relative forward price-to-earnings multiple of 0.54. Despite a 28% year-to-date drop in share prices due to mixed revenue guidance for Q2, analysts are bullish on the stock with an average rating of overweight and a consensus price target implying upside of 46%.


Target currently trades at a relative valuation ratio of 0.70, with analysts expecting a 36% gain over the next 12 months. The company reported better-than-expected earnings for Q1, despite a negative reaction to some LGBTQ+ themed merchandise. Analysts believe the controversy surrounding the merchandise will not have a significant impact on the company’s sales.

**Ulta Beauty**

Ulta Beauty had a relative forward P/E of 0.89 and a price target that implies upside of more than 30% – despite a 10% drop in share prices in 2023.

**Other Stocks**

Bath & Body Works, Chefs’ Warehouse, Signet Jewelers, and Victoria’s Secret also made the list of stocks trading at a discount.

Overall, for investors looking to capitalize on a resilient economy, these retail stocks represent an opportunity to do so at a discount.

What do you think?

Written by The Modest Man

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