Retail

Holiday Shopping Has Exploded Early: 4 Large-Cap Retail Winners to Buy Now

The year has flown by. It seems truly hard to believe that winter is just over a month away, the football season is already halfway over and Thanksgiving is right around the corner. What that means, of course, is that many people are already shopping for the holiday season. Spurred on by supply-chain worries, and with the internet playing a massive role now for brick-and-mortar leaders, they are ready once again to take on the internet giants.

Research indicates that omnichannel shoppers, those that use the internet and brick-and-mortar stores, tend to spend more than those who just go shopping at malls and shopping centers. While some of this has changed with the ongoing COVID-19 pandemic still hanging around, retailer expectations remain very positive.

We screened the BofA Securities research universe database looking for the mega-retailers that look poised to cash in this year. We found five stocks that are all rated Buy and look like excellent choices for investors looking to add retail exposure in front of the holiday season.

Amazon

This is the absolute leader in online shopping and is on the BofA Securities US 1 list of top stock picks. Amazon.com Inc. (NASDAQ: AMZN) serves consumers through retail websites that primarily include merchandise and content purchased for resale from vendors and those offered by third-party sellers.

The company serves developers and enterprises through Amazon Web Services (AWS), which provides computing, storage, database, analytics, applications and deployment services that virtually enable various businesses. AWS is also the undisputed leader in the cloud now, and many top analysts see the company expanding and moving up the enterprise information value chain and targeting a larger total addressable market.

Like every year, online sales should continue to grow, and Amazon remains the go-to portal for shoppers looking for bargains and a way to stay out of brick-and-mortar stores this year.

BofA Securities has a $4,250 price objective for Amazon.com stock, while analysts’ consensus figure is $4,039.94. The last trade on Tuesday came in at $3,540.70 per share.

Costco Wholesale

This has become the ultimate destination for the American consumer regardless of the economy. Costco Wholesale Corp. (NASDAQ: COST) has a unique business model. It operates membership warehouses, and it buys the majority of its merchandise directly from manufacturers, essentially cutting out the middleman. Costco sells in bulk but also at a lower price, thus fueling its rapid growth. With consumers having more free cash to spend as gasoline prices have dropped, this major retailer may continue to see large revenue gains.