3 Stocks to Trade the Back to School Trend - 7/18

Pay close attention to back to school stocks.

Companies: Target (SYM: TGT), Walmart (SYM: WMT), and Kohl’s (SYM: KSS)

With kids heading back to school in just weeks, we anticipate a bump in related stocks, such as Target (SYM: TGT), Walmart (SYM: WMT), and Kohl’s (SYM: KSS), for example.

This year, shoppers are likely to spend $31.3 billion, or about $586 per student this year, as compared to $31.9 billion, or $597 per student last year, according to Deloitte.

The firm also added: “Back-to-school shoppers overwhelmingly cite mass merchants (77%) as their most preferred retail format, followed by online retailers (65%) and off-price retailers (tied with department stores at 39%). Overall, 7 in 10 surveyed seek convenience (convenient locations, delivery options, and easy returns) — making it the number one driver for where they plan to spend the most.”

That being the case, keep an eye on stocks like Target (SYM: TGT).  Around July-August 2020, the stock exploded from about $120 to $187. Then, starting in June 2021, TGT ran from about $219 to $255.  In 2022, around the same time, TGT ran from about $135 to $180. In 2023, between July and August, the TGT stock rallied from about $127 to about $134. 

Walmart, Amazon, and Kohl’s saw similar moves for each of those years, too.

While sales may be flat year over year, we still expect for these retailers to rally as we get closer to schools reopening again.