3 Specialty Retail Stocks Wall Street Predicts Will Rally by More Than 30% By StockNews


© Reuters. 3 Specialty Retail Stocks Wall Street Predicts Will Rally by More Than 30%

The retail industry has made a stellar comeback this year thanks to rising consumer spending aided by multiple fiscal stimulus checks. And despite investors’ concerns that the spread of the COVID-19 Delta variant could foster market volatility, Wall Street analysts expect specialty retail stocks Petco Health and Wellness (WOOF), KAR Auction Services (KAR), and Conn’s (NASDAQ:) to rally in the near term. Read on.The specialty retail industry has registered significant growth in the last two quarters, driven by the faster-than-expected macroeconomic recovery. Rapid job growth and federal stimulus checks have buoyed consumer spending, allowing specialty retail companies to generate a significant improvement in their profit margins.

Approximately $400 billion of fiscal stimulus has been deployed since the American Rescue Plan Act was signed in March. Furthermore, $1.60 billion in fiscal stimulus checks were distributed in the last tranche over the six weeks ended June 21. While weekly unemployment claims rose slightly for the week ended July 17, continuing claims reached a fresh pandemic low of 3.24 million on July 22, indicating a solid job market.

Despite rising concerns regarding the spread of the COVID-19 Delta variant, the U.S. economic recovery is expected to remain on track, given the substantial pent-up demand and savings accumulated during the worst days of the pandemic. Furthermore, with consumer spending accounting for 70% of the U.S. economy, the retail industry should continue growing despite the current market volatility.

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