Consumer goods companies have witnessed strong demand in the second quarter of 2021 owing to rising discretionary spending driven by stimulus checks and an improving job market. According to a McKinsey & Company report…
pent-up demand and spending on discretionary drove spending to a 20% – 30% year-over-year increase in the second quarter.
While concerns over a slowdown in economic growth due to the resurgence of COVID-19 cases, and rising inflation is expected to keep the market volatile in the near term, many consumer goods stocks are well-positioned to dodge any short-term fluctuations based on their ability to capitalize on the pent-up demand for discretionary goods.
Robust digital infrastructure and impressive product launches should allow consumer goods companies Volkswagen AG (VWAGY – Get Rating), Adidas AG (ADDYY – Get Rating), Lands’ End, Inc. (LE – Get Rating), and Citi Trends, Inc. (CTRN – Get Rating) to generate rising sales in the coming months. Therefore, Wall Street analysts expect their stocks to rally by more than 60% in the coming months.
Owned by Porsche Automobil Holding SE (POAHY), VWAGY is a Germany-based automobile company that offers passenger cars, commercial vehicles, power engineering, and financial services worldwide. The company also develops vehicles and components for the group’s brands and also offers motorcycles.
In an announcement dated August 6, VWAGY said it will introduce the new ID.5 GTX all-electric powered SUV coupé on September 7, 2021, at the IAA Munich Motor Show. Based on the Modular Electric Drive Matrix (MEB), this fully connected SUV coupé fitted with Car2X technology possesses powerful dual engine four-wheel drive and will be the second model from the sporty GTX product brand. VWAGY hopes to increase its share of all-electric cars in Europe to 70% of its unit sales by 2030.
To strengthen its expertise in the integration of automotive software as part of its ACCELERATE strategy, on July 30, 2021, VWAGY established a joint venture with TraceTronic, a leading developer of high-quality software solutions for future vehicles, under the name neocx, that will construct a continuous integration/continuous testing (CI/CT) factory. VWAGY is looking forward to growing its automotive software integration and the digital customer experience as core competencies.
VWAGY’s sales revenue for its fiscal second quarter, ended June 30, 2021, increased 63.8% year-over-year to €67.29 billion ($78.86 billion). The company’s gross profit increased year-over-year to €12.52 billion ($14.67 billion). Its operating profit has been reported at €6.55 billion ($7.76 billion), compared to a €2.39 billion ($2.84 billion) loss in the prior-year period. VWAGY’s net earnings came in at €5.04 billion ($5.98 billion), versus a €1.54 billion ($1.82 billion) loss in the year-ago period. VWAGY’s EPS has been reported at €9.70, versus a €3.23 loss per share in the prior-year period. The company had €40.86 billion ($48.01 billion) in cash and cash equivalents as of June 30, 2021.
A $6.28 consensus EPS estimate for the current fiscal year represents a 212.8% improvement year-over-year. VWAGY surpassed consensus EPS estimates in three of the trailing four quarters. The $294.19 billion consensus revenue estimate for the current fiscal year represents a 9.3% gain from the prior-year period.
The stock has gained 85.2% over the past year and 42.8% over the past six months. It closed yesterday’s trading session at $32.73. The only Wall Street analyst providing a rating for the stock rated it Buy. The $54 average price target represents a potential 65% upside.
VWAGY’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock also has a B grade for Value. Click here to see the additional ratings for VWAGY (Sentiment, Quality, Stability, Growth, and Momentum).
VWAGY is ranked #5 of 62 stocks in the Auto & Vehicle Manufacturers industry.
Based in Germany, ADDYY designs, develops, produces, and markets various athletic and sports lifestyle products worldwide. The company offers footwear, apparel, accessories and gear, and golf products under the Adidas and Reebok brands. It sells its products through company-owned retail stores, mono-branded franchise stores, wholesale distribution, and e-commerce channels.
On June 16, 2021, ADDYY launched…
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