This week, the focus is on US retail stocks after Bureau of Labour Statistics reported that April inflation rose slightly lower than expected.
Retail stocks tend to have a high impact on inflation data, as this directly impacts consumer spending power and business costs.
Stephanie Link, chief investment strategist at Investopedia, says that a few US retail stocks have a good chance of performing well after the CPI’s reading for April.
Walmart, Amazon and Costco are among her top choices.
Walmart Inc (NYSE: WMT)
Walmart has warned that they will be raising their prices to counter tariffs after missing revenue targets in the first fiscal quarter.
According to the company, the increased costs of imports are due to the US Administration’s Trade Policies. Consumers could begin seeing an impact by the end May.
Stephanie Link is still as bullish on this retail giant, as the 4.5% rise in sales at the same store in the US indicates that “they are crushing it.”
She added that the NYSE listed firm was “being conservative in its guidance”.
Link believes that WMT is well positioned to absorb tariff-driven costs thanks to a fortress balance sheet.
She called Walmart an “all-weather” stock on CNBC’s SquawkBox, as 72% its sales are consumables.
WMT’s shares are even more attractive in 2025, with a dividend yield of close to 1 percent.
Amazon.com Inc. (NASDAQ: AMZN).
Hightower’s Chief Investment Strategist prefers to own Amazon this year for exposure in retail, as it has a global presence and continues growing its eCommerce market share.
Stephanie Link says that Amazon is well positioned to absorb any tariff increases.
It could also help protect the multinational against rising competition, such as Temu or Shein.
In a recent interview, Ms. Sherry argued that investors would still be interested in Amazon stocks in 2025 if “the US economy continues to chug on and the consumer does not die.”
Amzn shares have fallen more than 15 percent from their highs for the year, making them attractive in terms of value.
Costco Wholesale Corp. (NASDAQ: Costco)
Stephanie Link ranks Costco amongst her top 2025 picks, as the company is exceptionally well-positioned to navigate a macroeconomic environment that’s uncertain.
COST’s membership model is known for its ability to create customer loyalty, which translates into consistent revenue streams.
The retail giant’s supply chain efficiency and strategy of bulk pricing helps it to maintain profitability, even during challenging economic conditions.
Costco, like Walmart, is also a dividend paying stock. It currently offers a yield rate of 0.51%, which makes it a compelling addition to any portfolio.
Wall Street also agrees with Link’s assessment of Costco, as the stock is currently rated “overweight”, with price targets as high as 1,205 dollars, which indicates a potential gain in value by more than 20 percent from its current level.
The post Stephanie Link’s favourite retail stocks following April inflation data can be updated as new information becomes available.
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