Retail stocks Dick’s Sporting Goods (DKS), Nordstrom (JWN) and Five Below (FIVE), as well as coffee chain Starbucks (SBUX) and athletic gear maker Nike (NKE) are all moving toward buy points.
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The setups for those stocks come as U.S. coronavirus cases fall, vaccinations increase and states lift restrictions, after the pandemic last year forced temporary store closures and occupancy restrictions and forced stores and restaurants to go more digital. President Joe Biden’s stimulus plan will also put more money into consumers’ pockets.
Biden on Thursday said he would direct all states, tribes and territories to make all adults eligible for the coronavirus vaccine “no later than May 1.” He said the nation would have enough vaccine for U.S. adults by the end of that month.
And for chains with international locations, the pace of vaccinations and reopenings could be uneven across the globe.
Dick’s Sporting Goods
Shares of Dick’s Sporting Goods, up 2.6% to 75.66 in Friday’s stock market trading, are in a three-weeks-tight pattern. The buy point on that pattern is 80.42. DKS stock is five weeks into a consolidation, which could be a proper base in one more week, with the same 80.42 entry.
Dick’s stock also has recently bounced off its 50-day line, still presenting a buying opportunity for investors who want to pick up the stock a bit early.
The relative strength line for DKS stock is just below a high. The RS line tracks a stock’s performance vs. the S&P 500 index.
Dick’s reported better-than-expected fourth-quarter earnings on Tuesday. But the sporting goods retailer gave a cautious profit outlook for the year. DKS stock fell on the news. But shares jumped 5.5% for the week.
The results capped a year in which Dick’s had to close stores temporarily. But sales later rebounded, as more people — barred from gyms, bars, restaurants and entertainment venues due to the pandemic — occupied themselves with biking, golfing and other activities.
Oppenheimer analysts, however, have warned of a “a meaningful, if not violent normalization in spending trends, as coronavirus headwinds abate.”
DKS stock has a 90 Composite Rating and an 85 EPS Rating. Dick’s Composite Rating is the best of any of the retail stocks mentioned here.
Starbucks Stock
Starbucks stock, up 0.5% to 107.81 on Friday and 2.5% for the week, is in a flat base. It’s below reclaiming a 107.85 buy point on that base. If shares break past 110.57 — just above its March 1 peak, that could present another buying opportunity.
Even as Starbucks hovers near record highs, its Composite and EPS ratings both stand at 33. The Composite Rating is the weakest of any of the retail stocks mentioned in this story.
Starbucks in January offered a profit outlook for its fiscal second-quarter that came in below expectations. However, it forecast same-store sales growth of 5%-10% in the U.S., and a nearly 100% jump in same-store sales in China.
Starbucks earnings are expected to surge 143% in the current fiscal year.
Nordstrom Stock
Nordstrom stock, which jumped 9% to 40.87 on Friday, is in a consolidation with a 42.32 buy point. However, investors could have used 39.04 as an early entry Friday for JWN stock.
Nordstrom has a 48 Composite Rating. The EPS Rating on JWN stock is a weak 10. But the RS line hit a 52-week high on Friday.
The higher-end department store, when it reported fourth-quarter earnings this month, said business trends improved throughout the quarter, “with continued momentum exiting the year.”
CFRA analyst Camilla Yanushevsky, however, noted that Nordstrom and other department stores have had to make significant cost cuts. More store closures, she said, would likely happen across the space to stave off bankruptcy.
Cowen analyst Oliver Chen said that Nordstrom will be heading into the summer months with more consumer data at its disposal, thanks to its loyalty program.
“That being said, we expect fierce competition as many retailers are priming to capture re-opening dollars, and JWN will need to execute across channels, and have the right inventory in stock,” he said.
Five Below Stock
Five Below stock is in a consolidation going back to mid-January with a 198.19 buy point. Shares dipped 0.5% to 190.80 on Friday, but rose 4.1% for the week.
Investors could also pick up the stock if it makes a strong rebound off its 10-week line. Shares of the teen and tween-centric chain have a 76 Composite Rating and an 88 EPS Rating.
Five Below was a recent Stock of the Day.
Nike Stock
Nike stock rallied 5.3% last week to 140.54. Shares dipped 0.5% Friday, but it held its 50-day line. NKE stock is in a flat base with a potential 148.05 buy point. However, the RS line has drifted lower over the past few months.
Shares have a 59 Composite Rating, with a 63 EPS Rating.
Nike earnings are due Thursday night. Buying a stock ahead of earnings is highly risky.
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