ZacksCoronavirus-Led Stay-at-Home Aids DIY & Home Furnishing: 5 PicksZacks Equity ResearchJune 19, 2020, 11:18 pm
The coronavirus pandemic has changed the way we live and work. Though it has dampened businesses across the globe, it has also given rise to new trends.
Data provider S3 Partners had anticipated a decline in spending on furniture and home improvement with household finances being hit hard by economic challenges posed by the pandemic.
However, things have panned out in a different way. A huge number of Americans in lockdown have been spending lavishly on upgrading their living spaces, which has helped Do-It-Yourself (DIY) and homeware or home furnishing companies to flourish.
Living Space Upgrades Push Home Furnishing Stocks Higher
With lockdowns in place, people are spending more time at home. The work and study from home trend has increased demand for furniture. In fact, due to globalization, new designs and a variety of items are now available online. This has boosted growth of the home decor market further. With online retail open during the lockdown, furniture and other home decor items have been available at a discounted price, making it more affordable for customers.
Per a Technavio report, the online home decor market is poised to grow by $83.32 billion during 2020-2024, at a CAGR of almost 13%. Technavio offers an up-to-date analysis of the market taking into account the impact of the coronavirus pandemic.
Resurgence in DIY Trend
The DIY trend is not something new but has witnessed an upside amid the pandemic. Availability of time has pushed many toward gardening and other hobbies and with numerous guides available on the Internet, the DIY market has received a significant boost.
Additionally, eco-friendly DIY projects play a huge role in boosting the global DIY home improvement retailing market. For instance, mason jars or old coffee tins are used as recycled planters. People have developed a liking for growing herbs indoors in small spaces and big kitchens. These techniques coupled with DIY initiatives are not only cost-effective but also fun.
Several others have picked up wall painting, letter boards, shoe holders and furniture DIY projects during the lockdown. Some have even used DIY products in plumbing and building maintenance.
Per a Research Dive study, the DIY home improvement retailing market is expected to surpass $189.1 million by 2026, increasing at a CAGR of 4.1%.
The décor and indoor garden segment is expected to register revenues of $23.3 million by the end of 2026, witnessing a CAGR of 4.4%. The online segment that has already witnessed massive market growth is expected to register revenues of $84.9 million by 2026, thanks to the huge availability of DIY resources on online platforms.
Given the encouraging trends, we have shortlisted five stocks poised for solid growth.
RH operates as a retailer offering furniture, lighting, textiles, bathware, décor, outdoor and garden, and child and teen furnishings. The company’s expected earnings growth rate for the next quarter is 15.1% against the Zacks Retail – Home Furnishings industry’s projected earnings decline of 5.7%.
The Zacks Consensus Estimate for its current-year earnings has climbed 51.5% over the past 60 days. RH sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
eBay Inc. EBAY operates the marketplace and classifieds platforms that connect buyers and sellers. The company’s expected earnings growth rate for the current quarter is 51.5% against the Zacks Internet – Commerce industry’s projected earnings decline of 42.7%. The Zacks Consensus Estimate for its current-year earnings has moved up 14.6% over the past 60 days. eBay carries a Zacks Rank #1.
Lowe’s Companies, Inc. LOW operates as a home improvement retailer. It offers a line of products for construction, maintenance, repair, remodeling, and decorating. The company’s expected earnings growth rate for the current year is 16.3% against the Zacks Building Products – Retail industry’s projected earnings decline of 19.6%. The Zacks Consensus Estimate for its current-year earnings has moved 13.3% higher over the past 60 days. Lowe’s holds a Zacks Rank #2 (Buy).
Wayfair Inc. W engages in the e-commerce business, offering furniture, décor, decorative accents, housewares, seasonal décor, and other home goods. The company’s expected earnings growth rate for the current quarter is more than 100% against the Zacks Internet – Commerce industry’s projected earnings decline of 42.7%. The Zacks Consensus Estimate for its current-year earnings has moved 51.9% up over the past 60 days. Wayfair carries a Zacks Rank #2.
Etsy, Inc. ETSY operates online marketplaces for buyers and sellers. The company’s expected earnings growth rate for the current year is 38.2% against the Zacks Internet – Services industry’s projected earnings decline of 0.2%. The Zacks Consensus Estimate for its current-year earnings has climbed more than 100% over the past 60 days. Etsy holds a Zacks Rank #2.
5 Stocks to Soar Past the Pandemic:In addition to the companies you learned about above, we invite you to learn about 5 cutting-edge stocks that could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of the decade.