Here Are 5 Cyclical Stocks For Your Watchlist This Week
As we head into the upcoming earnings season, cyclical stocks would be in focus in the stock market now. After all, this would be the case as banks are kicking off the action later this week. Sure, all eyes may be on bank stocks now, but they are only part of the cyclical market. For newer investors wondering what are cyclical stocks, now could be a good time to learn. Namely, cyclical stocks belong to companies whose businesses follow business cycles in the economy. As such, in times when the economy is on the rise, these companies thrive. This would be where the current earnings season among other factors, comes into play.
Notably, analysts over at FactSet (NYSE: FDS) estimate that S&P 500 earnings could grow by 27.6% for the quarter. Should this be the case, it would mark the third-fastest pace for the index since 2010, according to the firm. Similarly, some of the top names in the cyclical space continue to bolster their offerings as well. We could look at Disney (NYSE: DIS) for example. Earlier today, the company officially launched its new in-park planning and attraction reservation system, Disney Genie. Elsewhere, industrial software firm Aspen Technology (NASDAQ: AZPN) is reportedly merging with Emerson Electric’s (NYSE: EMR) software division. Given all of this, could one of these cyclical stocks be worth watching in the stock market today?
Top Cyclical Stocks To Consider For Your October 2021 Watchlist
- SoFi Technologies Inc. (NASDAQ: SOFI)
- Starbucks Corporation (NASDAQ: SBUX)
- Amazon.com Inc. (NASDAQ: AMZN)
- Roku Inc. (NASDAQ: ROKU)
- Dutch Bros Inc. (NYSE: BROS)
SoFi Technologies Inc.
First, on this list of cyclical stocks, we have SoFi Technologies, a mobile-first service company that provides financial services. In essence, the company helps people achieve financial independence through its products for borrowing, saving, spending, and investing. Impressively, more than 2 million people use its services to get their money right. The company’s membership program comes with the key essentials for getting ahead, including career advisors and connection to a community of its users. SOFI stock currently trades at $18.39 to close out Monday’s trading session.
This seems to be investors responding to the coverage initiated by Morgan Stanley (NYSE: MS). The company gave SoFi Technologies an overweight rating, calling it a powerful revenue growth story as it continues to gain market share in the consumer finance space. Analyst Betsy Graseck says that despite competition rising among fintech companies for Gen Y & Z, SoFi has a leg up given its roots in the hardest part of consumer finance, lending, along with a robust digital offering. With this being said, should investors consider adding SOFI stock to their portfolios?
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Following that, we have Starbucks Corporation. The company operates a chain of coffeehouses and roastery reserves with headquarters in Washington. With over 33,000 stores worldwide, the company is the premier roaster and retailer of specialty coffee in the world. SBUX stock is up by 23% in the past year alone. Today, the company received a buy rating from Deutsche Bank (NYSE: DB).
Notably, Deutsche Bank analyst Brian Mullan boosted his rating of Starbucks to buy from hold while keeping his price target at $127, citing a valuation for the upgrade following the stock’s recent pullback. He also cites an incredible U.S. momentum and the prospect of sustained unit growth in China.
On September 9, 2021, the company also announced that it has increased its quarterly cash dividend to $0.49 per share. This increase will be effective with the dividend payment to be distributed on November 26, 2021, to shareholders of record on November 12, 2021. All things considered, will you add SBUX stock to your watchlist?
Amazon is a tech company that has made huge strides in the fields of e-commerce and cloud computing. Both its online marketplace and cloud computing platform are the largest in the world by revenue and market capitalization. Notably, its Amazon Web Services (AWS) provide on-demand cloud computing platforms and APIs to individuals, companies, and governments.
On September 29, 2021, AWS announced the general availability of Amazon Managed Service for Prometheus, a scalable, secure, and highly available service that makes it easier for customers to monitor containerized applications. This comes at a time where more customers are using containers to build modern applications because containers allow them to improve resource utilization and reduce costs. Given this piece of news, will you be on the lookout for AMZN stock right now?
Last but not least, we have Roku, a cyclical company that has pioneered streaming to the TV. The company connects users to the streaming content that they love and enables content publishers to build and monetize large audiences. Furthermore, it also provides advertisers with unique capabilities to engage consumers. In late September, the company announced a partnership with SEMP TCL, a pioneer electronics company in Brazil.
As part of the agreement, TCL will extend its global partnership with Roku to bring TCL Roku TV models to Brazil later this year. It will also introduce a brand-new lineup of SEMP Roku TV models in the country this week.
“Our goal with these launches is to bring intelligent solutions to everyday life and make it even more practical for consumers to stream content on their televisions. With the increasing number of Brazilians who started watching streaming channels as a replacement for the traditional pay-TV package, consumers can choose only the content they want to watch and pay for only those services. As a result, the partnership with Roku in Brazil is so strategic for the company,” said João Rezende, Product & GTM Manager for the TV / Audio and Video category at SEMP TCL. For this reason, will you watch ROKU stock?
Dutch Bros Inc.
Next up, we have another coffee chain operator, Dutch Bros (BROS). In brief, the Oregon-based company is an upcoming name in the U.S. specialty coffee scene. Through its selection of high-quality handcrafted beverages, BROS caters to consumers’ coffee needs. It operates via a network of 471 locations across 11 western U.S. states. While the company may be a ways off from the leading names in its field such as Starbucks, BROS stock continues to gain. In fact, the company’s shares ended Monday’s session up over 14% at $49.00 a share.
For the most part, the current gain in BROS stock would be thanks to a series of bullish updates on it. In detail, it received an Outperform rating from analysts at both Baird and Cowen (NASDAQ: COWN). Following that, analysts from JPMorgan (NYSE: JPM) and Piper Sandler (NYSE: PIPR) hit BROS stock with an Overweight rating. Across these four firms, the average price target for the company’s shares comes up to a cool $53.25 a stock. Overall, JPMorgan’s John Ivankoe highlights the company’s “growth prospects” and is bullish on BROS’ ability to “execute on strategy”. Could all this make BROS stock worth keeping an eye on for you?