Are Consumer Discretionary Stocks Lagging The Honest Company (HNST) This Year?

For those looking to find strong Consumer Discretionary stocks, it is prudent to search for companies in the group that are outperforming their peers. Is Honest (HNST) one of those stocks right now? By taking a look at the stock's year-to-date performance in comparison to its Consumer Discretionary peers, we might be able to answer that question.

Honest is a member of our Consumer Discretionary group, which includes 292 different companies and currently sits at #14 in the Zacks Sector Rank. The Zacks Sector Rank includes 16 different groups and is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors.

The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Honest is currently sporting a Zacks Rank of #2 (Buy).

The Zacks Consensus Estimate for HNST's full-year earnings has moved 32.9% higher within the past quarter. This shows that analyst sentiment has improved and the company's earnings outlook is stronger.

Based on the latest available data, HNST has gained about 18.8% so far this year. In comparison, Consumer Discretionary companies have returned an average of 2.9%. This shows that Honest is outperforming its peers so far this year.

Another Consumer Discretionary stock, which has outperformed the sector so far this year, is MGM Resorts (MGM). The stock has returned 4% year-to-date.

Over the past three months, MGM Resorts' consensus EPS estimate for the current year has increased 3.1%. The stock currently has a Zacks Rank #2 (Buy).

To break things down more, Honest belongs to the Consumer Products - Discretionary industry, a group that includes 25 individual companies and currently sits at #67 in the Zacks Industry Rank. On average, stocks in this group have gained 4.7% this year, meaning that HNST is performing better in terms of year-to-date returns.

In contrast, MGM Resorts falls under the Gaming industry. Currently, this industry has 39 stocks and is ranked #146. Since the beginning of the year, the industry has moved +4.8%.

Honest and MGM Resorts could continue their solid performance, so investors interested in Consumer Discretionary stocks should continue to pay close attention to these stocks.

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

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