Analyst's Handbook: Consumer DiscretionaryAnalyst’s Handbook: Consumer Discretionary Yardeni Research, Inc. October 30, 2020 Dr. Edward Yardeni 516-972-7683 [email protected]

Analyst’s Handbook:Consumer Discretionary

Yardeni Research, Inc.

April 16, 2021

Dr. Edward Yardeni516-972-7683

[email protected]

Mali Quintana480-664-1333

[email protected]

Please visit our sites atwww.yardeni.comblog.yardeni.com

thinking outside the box

Table Of Contents Table Of ContentsTable Of Contents

April 16, 2021 / Analyst’s Handbook: Consumer Discretionary www.yardeni.com


S&P 500: Consumer Discretionary 1-2S&P 500: Consumer Discretionary (cont) 3-4S&P 500: Consumer Discretionary Retailers 5S&P 500/400/600 Consumer Discretionary YTD 6-8Earnings 9Revenues & Margins 10Earnings Growth & Valuation 11

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 2275

325

575

825

1075

1325

1575

75

325

575

825

1075

1325

15754/16

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200-day moving average.* Ratio scale.

Source: Standard & Poor’s and Haver Analytics.

S&P 500 CONSUMER DISCRETIONARY STOCK PRICE INDEX*

Figure 1.

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24.10

.15

.20

.25

.30

.35

.40

.10

.15

.20

.25

.30

.35

.40

S&P 500 CONSUMER DISCRETIONARY(as a ratio of S&P 500)

4/16

Note: Shaded areas denote recessions according to the National Bureau of Economic Research. Monthly through December 1990, then weekly. Monthlydata an average of Auto, Auto Parts, Building Materials, Footwear, Homebuilding, Household Furnishing, Leisure Time, Newspapers, Publishing,and Textile Apparel industry ratios.Source: Standard & Poor’s Corporation.

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Figure 2.

S&P 500: Consumer Discretionary

Page 1 / April 16, 2021 / Analyst’s Handbook: Consumer Discretionary www.yardeni.com


Figure 3.

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 2275

275

475

675

875

1075

1275

1475 4/16CONSUMER DISCRETIONARY

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 220

200

400

600

800

1000

1200

1400

1600

18004/16S&P 500 HOMEBUILDING(DHI LEN PHM)

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 2250

100

150

200

250

300

350

400

450

4/16

S&P 500 APPAREL, ACCESSORIES,LUXURY GOODS(COH HBI KORS PVHRL UA VFC)

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 2225

125

225

325

425

525

625

725

8254/16S&P 500 HOUSEHOLD APPLIANCES

(WHR)

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22100

700

1300

1900

2500

3100

3700

4300

4900

5500

4/16

S&P 500 FOOTWEAR(NKE)

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 2225

125

225

325

425

525

4/16

S&P 500 HOUSEWARES & SPECIALTIES(NWL)

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 2225

50

75

100

125

150

175

200

225

250

4/16

S&P 500 HOME FURNISHINGS(LEG MHK)

200-day moving averageSource: Standard & Poor’s Corporation.

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 2275

150

225

300

375

450

4/16S&P 500 DISTRIBUTORS(GPC LKQ)

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S&P 500: Consumer Discretionary



Figure 4.

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22255075

100125150175200225250275300325350375400

4/16S&P 500 AUTO PARTS & EQUIPMENT(BWA DLPH JCI)

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 2250

100

150

200

250

300

350

400

9/21

S&P 500 ADVERTISING(IPG OMC)

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 220

25

50

75

100

125

150

2/26

S&P 500 TIRES & RUBBER(GT)

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 220

100

200

300

400

500

600

700

800

900

9/21

S&P 500 BROADCASTING(CBS DISCA DISCK SNI TGNA)

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 220

50

100

150

4/16

S&P 500 AUTOMOBILE MANUFACTURERS(F GM)

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 2250

100

150

200

250

300

350

400

450

500

9/21S&P 500 MOVIES & ENTERTAINMENT(DIS FOX FOXA TWX VIAB)

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 220

40

80

120

160

200

240

280

6/19

S&P 500 MOTORCYCLE MANUFACTURERS(HOG)


06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 2250

100

150

200

250

300

350

400

9/21

S&P 500 PUBLISHING(NWS NWSA)

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S&P 500: Consumer Discretionary (cont)



Figure 5.

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 2250

100

150

200

250

300

350

4/16

S&P 500 LEISURE PRODUCTS(HAS MAT)

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22200

400

600

800

1000

1200

1400

1600

1800

2000

2200

24004/16S&P 500 RESTAURANTS(CMG DRI MCD SBUX YUM)

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 2250

150

250

350

450

550

650

4/16S&P 500 HOTELS, RESORTS & CRUISE LINES(CCL MAR RCL WYN)

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06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22150

550

950

1350

1750

2150

4/16

S&P 500 CASINOS & GAMING(WYNN)

S&P 500: Consumer Discretionary (cont)



Figure 6.

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22200

600

1000

1400

1800

2200

2600

3000

3400

3800

42004/16S&P 500 RETAILING

(AAP, AMZN, AN, AZO, BBY, DG, DLTR,EXPE, FL, GPC, GPS, HD, JWN, KMX, KSS,LB, LOW, M, NFLX, ORLY, PCLN, ROST,SIG, TGT, TIF, TJX, TRIP, TSCO,ULTA, URBN)

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22250

500

750

1000

1250

1500

1750

2000

2250

2500

27504/16S&P 500 GENERAL MERCHANDISE

(DG DLTR TGT)

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 220

200400600800

10001200140016001800200022002400 4/16

S&P 500 APPAREL RETAIL(FL GPS LB ROST TJX URBN)

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22150

450

750

1050

1350

1650

1950

2250

2550

2850

3150

34504/16S&P 500 HOME IMPROVEMENT RETAIL(HD LOW)

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 2250

125

200

275

350

425

500

575

650

725

800

875

4/16S&P 500 COMPUTER & ELECTRONICS RETAIL(BBY)

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 220

2000

4000

6000

8000

10000

12000

140004/16S&P 500 INTERNET RETAIL(AMZN EXPE NFLX PCLN TRIP)

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 220

50

100

150

200

250

300

350

400

9/18

S&P 500 DEPARTMENT STORES(JWN KSS M)


06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 2225

50

75

100

125

150

175

200

4/16

S&P 500 SPECIALTY STORES(SIG TIF TSCO ULTA)

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S&P 500: Consumer Discretionary Retailers



Jan Feb Mar Apr May Jun2021

-45

-25

-5

15

35

11.4

Figure 7.S&P 500 LargeCap

All Sectors


-15

0

15

30

45

60

75

18.0

S&P 400 MidCap


-15

0

15

30

45

60

75

20.5

S&P 600 SmallCap


-45

-25

-5

15

35

55

10.6ConsumerDiscretionary


-65

-45

-25

-5

15

35

55

27.3


-65

-45

-25

-5

15

35

5540.6


-65-45-25

-515355575

Advertising


-65

-45

-25

-5

15

35

10.2

ApparelRetail


-75-55-35-15

5254565

54.2


-15

5

25

45

65 60.2


-10

0

10

2016.2

Apparel,Accessories &Luxury Goods


-45-25

-51535557595

22.2


-75-55-35-15

5254565

43.5


-105

-65

-25

15

55

12.1Auto Parts &Equipment


-55-35-15

525456585

16.6


-55

-35

-15

5

25

45

16.3


-80

-40

0

40

80

120

160

9.8

AutomobileManufacturers


-80

-40

0

40

80

120

160

50.8


-80

-40

0

40

80

120

160

29.8


-55

-35

-15

5

25

45

65

24.3AutomobileRetail


-55

-35

-15

5

25

45

65

28.8


-75

-55

-35

-15

5

25

4534.5


-30

-10

10

30

50

70

Broadcasting& Cable TV


-60-40-20

020406080

11.8Casinos &Gaming


-80-60-40-20

020406080

10.2

yardeni.com


-60

-20

20

60

100

140

20.1

Computer &ElectronicsRetail

Source: Standard & Poor’s.

S&P 500/400/600 Consumer Discretionary YTD




-90-70-50-30-10103050


DepartmentStores

Distributors

EducationServices


-90-70-50-30-101030507090

35.2

S&P 400 MidCap


-30

-10

10

30

50

70

90

48.8

S&P 600 SmallCap


-80-60-40-20

020406080

16.1


-80-60-40-20

020406080

.6


-40

0

40

80

120

160

-5.1

Footwear


-80

-40

0

40

80

120

160

21.1


-100

-60

-20

20

60

100

21.7


-100-80-60-40-20

020406080

12.0GeneralMerchandiseStores


-100-80-60-40-20

020406080

17.1


-100-80-60-40-20

020406080

100

59.6


-70

-50

-30

-10

10

30

5030.8

HomeFurnishings


-90-70-50-30-1010305070

46.3


-50-30-101030507090

16.5


-50

-30

-10

10

30

50

25.3

HomeImprovementRetail


-60

-20

20

60

100

33.6Homebuilding


-80

-40

0

40 33.9


-60

-40

-20

0

20

40

60

36.6


-50

-30

-10

10

30

50

HomefurnishingRetail


-70-50-30-1010305070

57.6


-30-101030507090

110

45.2


-80-60-40-20

020406080

19.9Hotels, Resorts& Cruise Lines


-40

-20

0

20

40

60

80

yardeni.com


-75-50-25

0255075

100

30.1HouseholdAppliances






-60

-30

0

30

60

90

120

26.0


Housewares &Specialties


-60

-30

0

30

60

90

120S&P 400 MidCap


-30

-10

10

30

50

70

90

6.2

InternetRetail


-80-60-40-20

0204060

4.8LeisureProducts


-60-40-20

020406080

14.8


-70

-50

-30

-10

10

30

50

MotorcycleManufacturers


-50-30-101030507090

110130

Movies &Entertainment


-35

-15

5

25

45

65

Publishing


-35

-15

5

25

45

65


-60

-40

-20

0

20

40

60

9.8Restaurants


-60

-40

-20

0

20

40

60

16.2


-80-60-40-20

0204060

42.1


-50-30-101030507090

SpecializedConsumerServices


-30

-10

10

30

50

70

15.2


-90

-50

-10

30

70

37.8


-40

-20

0

20

40

60

80

21.1SpecialtyStores


-80-60-40-20

0204060

24.3


-80

-40

0

40

8069.5

yardeni.com


-40

-20

0

20

40

60

80

Tires &Rubber





95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 225

15

25

35

45

55

5

15

25

35

45

5520 21

22

4/8

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* Time-weighted average of consensus estimates for current year and next year. Monthly through December 2005, then weekly.Source: I/B/E/S data by Refinitiv.

S&P 500 CONSUMER DISCRETIONARY OPERATING EARNINGS PER SHARE(analysts’ average forecasts, ratio scale)

Consensus ForecastsAnnual estimates

Forward earnings*

Figure 10.

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22-50

-40

-30

-20

-10

0

10

20

30

40

-50

-40

-30

-20

-10

0

10

20

30

40

NERI Jan 16.7 Feb 13.7 Mar 9.4

Mar

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* Three-month moving average of the number of forward earnings estimates up less number of estimates down, expressed as a percentageof the total number of forward earnings estimates.Source: I/B/E/S data by Refinitiv.

S&P 500 CONSUMER DISCRETIONARY NET EARNINGS REVISIONS*

Figure 11.

Earnings



2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022250

350

450

550

650

750

250

350

450

550

650

750

20

2122

4/8

yardeni.com

* Time-weighted average of consensus estimates for current year and next year. Monthly through December 2005, then weekly.Source: I/B/E/S data by Refinitiv.

S&P 500 CONSUMER DISCRETIONARY REVENUES PER SHARE(analysts’ average forecasts, ratio scale)


Forward revenues*

Figure 12.

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20222

3

4

5

6

7

8

9

10

2

3

4

5

6

7

8

9

10

20

21

22

4/8

yardeni.com

(using analysts’ average earnings and revenues forecasts)

* Time-weighted average of the consensus estimates for current year and next year. Monthly through December 2005, weekly thereafter.Source: I/B/E/S data by Refinitiv.

S&P 500 CONSUMER DISCRETIONARY PROJECTED PROFIT MARGIN


Forward profit margin* (6.9)

Figure 13.

Revenues & Margins



95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22-20

-10

0

10

20

30

40

50

60

-20

-10

0

10

20

30

40

50

60

4/8

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* STEG is year-ahead forward consensus expected short-term earnings growth. STRG is year-ahead forward consensus expected short-termrevenue growth. LTEG is five-year consensus expected long-term earnings growth.Monthly data through 2005, weekly thereafter.Source: I/B/E/S data by Refinitiv.

S&P 500 CONSUMER DISCRETIONARY STRG, STEG, & LTEG(percent)

LTEG* (32.9)

STEG* (46.0)

STRG* (13.8)

STEG and LTEG capped at 50%

Figure 14.

10

15

20

25

30

35

40

45

10

15

20

25

30

35

40

45

4/8

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22.0

.5

1.0

1.5

2.0

2.5

3.0

.0

.5

1.0

1.5

2.0

2.5

3.0

4/8

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* Price divided by 12-month forward consensus expected operating earnings per share.** Sector or industry forward P/E relative to S&P 500 forward P/E.

*** Sector or industry forward P/E relative to sector or industry consensus 5-year LTEG forecast.Source: I/B/E/S data by Refinitiv.

S&P 500 CONSUMER DISCRETIONARY VALUATION

Forward P/E* (35.1)

Relative P/E** (1.6)

PEG Ratio*** (1.1)

Figure 15.

Earnings Growth & Valuation



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Documents

Analyst's Handbook: Consumer DiscretionaryAnalyst’s Handbook: Consumer Discretionary Yardeni Research, Inc. October 30, 2020 Dr. Edward Yardeni 516-972-7683 [email protected]