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3 Buy-Rated Big-Box Stores at or Near All-Time Highs

2 13 11
07.09.2021

Even though the spread of the COVID-19 Delta variant is leading to increasing COVID-19 cases, the big-box retail industry is expected to witness a strong rebound in sales as progress on the vaccination front continues to foster rising foot traffic in stores. Rising investor optimism about the industry’s growth prospects has caused quality big-box stocks Walmart (WMT), Costco (COST), and BJ’s Wholesale Club (BJ) trade near their all-time highs. These three stocks also currently have an overall B (Buy) rating in our POWR Ratings system. So, let’s take a closer look at these names.

Retail sales declined over the past few months as the resurgence of the COVID-19 cases again restricted people from the outdoor activities that they only recently resumed after a long period. According to Trading Economics data, U.S. retail sales fell 1.1% in July 2021, versus a consensus estimate of a 0.3% decline.

However, the big-box retail industry is expected to grow in the near term as more people get vaccinated, and the foot traffic in stores again picks up. Gus Faucher, the chief U.S. economist at PNC, said last month, “Although retail sales fell in July, the outlook for consumer spending remains positive.” Furthermore, according to a Forrester report, despite online growth, stores will still account for three-fourths of retail sales in 2024.

So, because the prospects look bright for the big-box retail industry, we think it could be wise to bet on established big-box retail stocks Walmart Inc. (WMT), Costco Wholesale Corporation (COST), and BJ's Wholesale Club Holdings, Inc. (BJ). They each have an overall B (Buy) rating in our proprietary POWR Ratings system. Moreover, their shares are currently hovering near their all-time price highs and could keep surging in the near term.

Click here to checkout our Retail Industry Report for 2021

Walmart Inc. (WMT)

One of the largest and most diversified retailers globally, WMT operates primarily........

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