Markets

Consumer Sector Update for 05/16/2018: CMG, SBUX, M, YUM

Top Consumer Stocks

WMT +1.59%

MCD -0.16%

DIS +1.92%

CVS +0.30%

KO -0.38%

Consumer stocks were mostly higher in late trading, with shares of consumer staples companies in the S&P 500 advancing over 0.6% this afternoon while shares of consumer discretionary firms in the S&P 500 were climbing more than 0.7%.

Among consumer stocks moving on news:

+ Chipotle's ( CMG ) was climbing over 4% higher in late Wednesday trading, earlier this afternoon making a 5% advance, after analysts at Argus today raised their investment recommendation for the casual-dining restaurant chain to Buy and set a $540 price target for its stock, arguing Wall Street is not including the company's prospects for accelerating growth in same-store sales and earnings in its share price. "We expect new CEO Brian Niccol to strengthen the company's menu offerings and marketing program," the Argus analysts wrote in a new research note Wednesday. The brokerage also raised its forecast for FY18 per-share earnings estimate by 60 cents to $8.80 per share and boosting its outlook for FY19 EPS by 40 cents to $10.40 per share.

In other sector news:

+ Macy's ( M ) climbed to a 15-month higher on Wednesday, rising over 10% to its best share price since February 2017 at $33.03 a share, after reporting Q1 net income and sales exceeding internal projections and topping analyst estimates and raising its FY18 forecast. Excluding one-time items, the department-store chain earned $0.48 per share during the 13 weeks ended May 5, up from $0.26 per share during the same quarter last year and beating the Capital IQ consensus by $0.13 per share. Net sales grew 3.6% year-over-year to $5.54 billion, also besting the $5.39 billion analyst mean. Same-store sales rose 3.9% during Q1. It sees same-store sales this year increasing 1% to 2% in 2018 on an owned plus licensed basis, up from its prior view modelling same-store sales growth of between 0% to 1%.

+ Starbucks ( SBUX ) was almost 1% higher Wednesday, roughly halving its prior gain that followed the coffee chain disclosing efforts to more than triple its revenue and more than doubling operating income at its stores in China over FY17 levels by 2022. The company said it is expecting to open 600 new locations during each of the next five years, doubling its store count in China to 6,000 in 230 cities.

+ Yum! Brands ( YUM ) has turned higher again on Wednesday, bouncing back from a small, mid-morning decline, after saying its Pizza Hut units was teaming up with the Telepizza Group to accelerate its growth across Latin America, the Caribbean, Spain, Portugal and Switzerland. Telepizza Group is a Spanish pizza delivery company with more than 1,600 stores in over 20 countries and the new, strategic partnership and master franchise alliance is expected to double Pizza Hut's footprint in those regions and becoming the largest restaurant chain in Latin America and the Caribbean by unit number.

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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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