Luxury: Citigroup's Top 6 Stocks That Will Benefit From A Rise In Luxury Spending

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(By Rebecca Lipman)

Interested in the trends of luxury brands? Citigroup has helpfully put together a list of luxury stocks from around the world that are expected to rise higher.

According to Business Insider’s Eric Platt, “the strategy holds that luxury good and discount product companies will continue to post strong returns, while firms in the middle will face increasing pressure.”

“We believe this is due to relatively lower levels of unemployment for consumers with a college degree (4.0% vs. total unemployment of 9.1%) and higher consumer confidence (54.2 vs. national average of 45.4),” Deborah Weinswig, the lead Citi analyst, wrote in the report.

Do you think that wisdom will reflect in the profits of luxury companies?  If so, you may be interested in Citi’s top luxury picks. Here are the names trading on the US stock market:

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1. Brown-Forman Corporation (BF-B): Market cap of $10.63B. Brown-Forman Corporation engages in manufacturing, bottling, importing, exporting, and marketing alcoholic beverages. Target price at $85 vs. current price at $74.63. Implies a potential upside of 13.89%. The stock has gained 21.36% over the last year.

2. Apple Inc. (AAPL): Market cap of $369.36B. Designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. Target price at $500 vs. current price at $401.36. Implies a potential upside of 24.58%. Might be undervalued at current levels, with a PEG ratio at 0.77, and P/FCF ratio at 12.28. The stock has gained 27.05% over the last year.

3. Estee Lauder Companies Inc. (EL): Market cap of $19.56B. Engages in the manufacture, marketing, and sale of skin care, makeup, fragrance, and hair care products worldwide. Target price at $112 vs. current price at $119.77. Implies a potential upside of -6.49%. Exhibiting strong upside momentum--currently trading 22.52% above its SMA20, 23.74% above its SMA50, and 23.28% above its SMA200. The stock has had a good month, gaining 15.39%.

4. Starwood Hotels & Resorts Worldwide Inc. (HOT): Market cap of $9.94B. Operates as a hotel and leisure company worldwide. Target price at $60 vs. current price at $51.32. Implies a potential upside of 16.91%. This is a risky stock that is significantly more volatile than the overall market (beta = 2.07). The stock has had a good month, gaining 31.16%.

5. Starbucks Corporation (SBUX): Market cap of $30.72B. Operates approximately 16,858 stores, including 8,833 company-operated stores and 8,025 licensed stores. Target price at $48 vs. current price at $41.29. Implies a potential upside of 16.25%. The stock has had a good month, gaining 10.55%.

6. Saks Incorporated (SKS): Market cap of $1.75B. Operates fashion retail stores in the United States. Target price at $13 vs. current price at $10.69. Implies a potential upside of 21.61%. This is a risky stock that is significantly more volatile than the overall market (beta = 2.5). The stock is a short squeeze candidate, with a short float at 32.21% (equivalent to 9.26 days of average volume). The stock has had a good month, gaining 23.45%. 



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Business , Stocks

Referenced Stocks: AAPL , BF-B , EL , HOT , SBUX , SKS

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