To begin, cyclical stocks are companies whose performance is closely tied to the overall economic cycle. These companies typically experience greater demand for their products or services during periods of economic growth and expansion and may see a decline in demand during times of economic contraction. Examples of cyclical industries include consumer discretionary, industrial, and energy sectors.
Investing in cyclical stocks can provide investors with significant opportunities for growth and returns, particularly during periods of economic expansion. As the economy expands, consumer and business spending typically increases, leading to higher demand for cyclical products and services. This increased demand can lead to higher revenue and profits for cyclical companies, which may lead to share price appreciation and the potential for dividend payments.
However, investing in cyclical stocks also carries risks. These companies are often more sensitive to economic and market conditions than other sectors and may experience significant declines in demand and profitability during times of economic contraction. Additionally, cyclical stocks may be subject to fluctuations in commodity prices, supply chain disruptions, and changes in consumer and business spending habits. As with any investment, it is important to conduct thorough research and analysis before investing in cyclical stocks. Considering this, check out these two cyclical stocks in the stock market now.
Cyclical Stocks To Watch In The Stock Market Today
Delta Air Lines (DAL Stock)
Starting off, Delta Air Lines Inc. (DAL) is a major airline company that provides air transportation for passengers and cargo throughout the United States and internationally. Delta is a cyclical stock, and its performance is closely tied to broader economic conditions, with passenger traffic and revenue heavily influenced by economic cycles.
In January, Delta Air Lines announced its financial results for its December 2022 quarter. Diving in, the company reported earnings per share of $1.48, to go along with revenue of $13.4 billion. This exceeded the consensus estimate of $1.31 per share on revenue of $12.4 billion. Moreover, Delta’s revenue also grew by 41.9% on a year-over-year basis.
Since the start of 2023, shares of Delta Air Lines stock have jumped by 18.61%. While, on Thursday’s mid-morning trading session, DAL stock is trading slightly down on the day by 0.96% at $38.65 per share.
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TJX Companies (TJX Stock)
Last but not least, The TJX Companies Inc. (TJX) is a leading off-price retailer that offers a wide range of consumer products such as clothing, home goods, and accessories. TJX operates under multiple brands, including T.J. Maxx, Marshalls, and HomeGoods.
Earlier in the month, The TJX Companies, Inc. (TJX) announced that it will be releasing its fourth quarter and full year Fiscal 2023 sales and earnings results on Wednesday, February 22, 2023, before 9:30 a.m. ET. Back in November, the company posted Q3 2022 earnings of $0.86 per share and revenue of $12.3 billion. In the Q3 2022 report, the company said that it estimated Q4 2022 earnings in the range of $0.85 to $0.89 per share.
Year-to-date, shares of TJX stock are up another 1.19% so far. Additionally, during Thursday’s mid-morning trading action, TJX Companies stock is trading red on the day so far by 0.84%, trading at $79.95 a share.
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