Retail stocks have been on the ropes for some time now, and things aren’t looking much brighter as we approach the summer months. Typically, that’s when gas prices start to trend up, and with levels already hit by inflation, it’s not good news as we segue into summer blend gas (a more expensive blend) and higher demand with the summer vacation season. But retailers are looking mostly up today.
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Indeed, Target (NYSE:TGT), Hasbro (NASDAQ:HAS), and Mattel (NASDAQ:MAT) gained fractionally, with Kohl’s (NYSE:KSS) leading the way, up over 1.5%. Meanwhile Walmart (NYSE:WMT) is proving the unexpected laggard, down fractionally.
The biggest issue facing retailers right now is a resurgence in global tension, which is having an immediate impact on oil prices (CM:CL). While oil prices were already on the uptick thanks to the time of year, the recent issues in the Middle East and Russia—still the largest sources of oil on the planet—aren’t exactly helping matters much.
While gas prices haven’t yet made it back to their 2022 highs, they’re definitely on the way back up. If they get there at a time when the price of everything else is elevated, then that’s likely going to prompt some consumers to cut back and tighten their belts. It’s a development that no one wanted to see, and it’s making shipping products that much tougher by driving up prices accordingly.
Online Sales Are Making a Comeback
We’re already seeing some changes; while the U.S. retail market actually managed to gain in the first quarter, the news out of the UK was nowhere near so bright. The UK’s retail sales were flat in the last month, with March proving no better than February. Meanwhile, there are signs that gas prices may impact not so much what consumers buy but where they buy it. Online sales are making a comeback, with the Department of Commerce in the U.S. revealing that online retail sales were up 2.7% in March. That’s actually a faster growth rate than the retail sector in general, which gained only 0.7%.
Which Retail Stocks Are a Good Buy Right Now?
Turning to Wall Street, the leader in the retail sector right now is MAT stock, among those mentioned today. This Moderate Buy with an average price target of $23.10 can offer investors a 27.13% upside potential. Meanwhile, the laggard is HAS stock, a Moderate Buy with only a 6.63% upside potential thanks to its average price target of $59.20.
