Consumer sentiment could surprise to the upside in 2024 as rates finally begin to turn lower. Indeed, the Federal Reserve may just get the gentle economic landing they’ve worked hard to orchestrate. While it wasn’t an easy landing for the Fed to engineer, it looks like the U.S. economy may very well be spared from the pains of recession, thanks to Fed Chair Jerome Powell — a man many may have been wrong to doubt.
Though consumer spending habits can shift suddenly, I do think things are looking up after a pretty upbeat holiday season for certain consumer-facing firms. Additionally, as retailers embrace generative artificial intelligence (AI) and data analytics, they may have more tools to steer customers toward the goods they didn’t even know they wanted.
In short, the potential for consumer relief and the continued advancement in gen AI and data analytics seem to paint a pretty picture for many players in the consumer scene. Let’s check out three consumer stocks analysts appear to like right now.
Coca-Cola (NYSE:KO) is a staple within the fridges of consumers across the globe. Even if your garage isn’t filled with cases of Classic or Cherry Coke, you probably still drink Coke-owned products regularly. The beverage juggernaut is behind a wide range of tasty offerings, ranging from sports drinks like Powerade to healthier offerings, including Fairlife Milk and Glaceau Smartwater.
Of late, the stock has been lagging the Dow Jones, down around 2% over the past year versus the Dow’s respectable 13%. Undoubtedly, Coke stock may have lost its appeal in an age where only artificial intelligence (AI) stocks will do! That said, I view KO stock as a value play with overlooked growth prospects.
For instance, Coke CEO James Quincey recently remarked on his firm’s plans to invest $1 billion a year in India, a booming market that could bring the fizz back to Coke shares. It’s a significant move that could more than justify the stock’s relatively modest 23.85 times trailing price-to-earnings (P/E) multiple. If Coke can grab more market share in India, the rewards could be substantial, perhaps big enough to help KO stock make a run for its prior highs.
With its headline-grabbing gen AI business and dominance in the public cloud, Amazon (NASDAQ:AMZN) is much more than just a digital retailer nowadays. Still, Amazon was built with the primary goal of making the lives of its customers easier, especially those who continue to pay for Prime memberships.
With rapid, low-cost shipping and a digital storefront that conveniently sells almost everything your average consumer could desire, I’d argue it’s quite a chore to go shopping anywhere else but the Amazon app. Indeed, most Prime users would probably not trade anything for the convenience of free same- or next-day shipping.
Going into 2024, Amazon stock is riding high on the momentum it built since the depths of December 2022. It truly has been a great run for the Magnificent Seven constituent. And it’s probably not over yet, as the firm looks to transform Amazon Web Services (AWS) into a global powerhouse. Recently, the firm noted its intent to spend $15 billion (around 2.3 trillion yen) in Japan.
I view Amazon’s Japan investment as incredibly timely, given the Japanese stock market (Nikkei 225) has been scorching hot of late, with the index recently climbing to heights not seen in many decades.
In many ways, Apple (NASDAQ:AAPL) is as much a consumer products company as it is an innovative technology titan. The company recently opened up its latest product, Apple Vision Pro, to pre-orders. And demand has been incredibly hot, with pre-orders estimated to be in the range of 160,000 to 180,000, according to Apple analyst Ming-Chi Kuo.
Niche product or not, Vision Pro’s impressive start seems to have caught some folks, Kuo included, by surprise. Can Vision Pro continue to stay ahead of the curve when it comes to analyst demand expectations? If the spatial computing boom is really upon us, I’d say it’s more than possible!
However, with shares trading at just shy of 32 times trailing P/E again, it’s hard to visualize AAPL stock blasting past the $200 mark without reporting a massive quarterly earnings beat driven by much hotter-than-anticipated iPhone 15 demand. A multiple expansion can only take a stock so far.
For now, Apple stock still seems to be a Magnificent Seven stock many investors have mixed feelings about. It’s still innovating, but there have been many obstacles (Apple Watch drama and Mac sales woes) to clear over the past year. In 2024, look for Apple to prove it’s still a magnificent company worthy of staying in the Mag Seven basket.
On the date of publication, Joey Frenette owned shares of Apple and Amazon. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.