Goldman’s retail stock picks for Black Friday and the holidays

This year’s holiday spending outlook appears fairly resilient, benefiting a few online and discount retailers, according to a recent Goldman Sachs survey. Goldman recently surveyed 1,000 U.S. consumers about their holiday shopping plans, sorted by channel, products and retailers. Nearly 60% of the respondents said they plan to spend the same amount or more on their holiday purchases this year, with trends appearing just slightly weaker than last year, Goldman found. “While consumers remain focused on sales/discounts amidst inflationary pressures, perceived prices and promotional importance moderated Y/Y which we believe reflects sequentially strengthening consumer sentiment overall,” analyst Brooke Roach wrote in a Sunday note to clients, adding that lower-income consumers intend to spend more this year, per the survey. “We continue to see a healthy holiday shopping backdrop for retailers that offer strong value and innovation across their assortments,” Roach said. Given this backdrop, Goldman named several companies that it thinks are best-positioned this holiday season, including buy-rated Walmart , Target , Kontoor Brands and e-commerce giant Amazon . The firm noted that online retail and discount shopping channels, like dollar stores, are gaining increasing interest from shoppers. Amazon remains one of the most popular retail destinations for holiday shopping, attracting slightly more interest compared to the prior year, according to Goldman. “We observe a continuation of broad-based, pre-holiday selling events, such as Amazon’s July and October Prime Day Events (with both events hosted for the third year in a row), which we believe continues to encourage early shopping,” Roach said. Amazon is known to be a heavy-hitter in Black Friday sales. Last year it touted “record-breaking” sales in the run-up period to Cyber Monday as consumers flocked to the online platform for greater discounts. Shares are up more than 36% this year, and analysts polled by LSEG see nearly 12% upside. Shares of Walmart hit a fresh high on Tuesday and are up more than 73% this year. Analysts see 5% upside from current levels, per LSEG. The company previously raised its full-year outlook after posting third-quarter earnings and revenue that beat expectations, citing growth in e-commerce and improvements in sales outside of the grocery department. Target, another forecasted retail winner this season from Goldman, has lagged its retail peers this year, down 8% in 2024. The big-box retailer last week reported its biggest earnings miss in two years . Even as the stock has had a rough year, consensus price targets call for 11% upside from current levels, per LSEG. Wrangler brand owner Kontoor Brands was also among Goldman’s buy-rated picks that it thinks can offer strong value and product innovation. Shares are up 47% in 2024, and analysts surveyed by LSEG see about 1% upside.