In this piece, we will look at the best consumer cyclical stocks to buy according to analysts.
While most media attention is focused on AI and data center stocks, reports about the American consumer present a mixed picture. Ahead of the Thanksgiving Holiday, data from the Commerce Department revealed that retail sales in the US grew by 0.2% in September in a slowdown of the 0.6% August growth figure. Some of the weakest sectors were clothing retailers, electronics and appliances, and car dealerships, with each sector representing dips of 0.7%, 0.5%, and 0.3%, respectively.
The Commerce Department’s data matched figures released by the Conference Board. The Board’s Consumer Confidence Index revealed that its November reading sat at 88.7 points, for a sharp drop of 6.8 points over October’s 95.5 reading. Additionally, consumers weren’t optimistic for the future either, as the Expectations Index sat at 63.2 points in an 8.6 point drop over October’s reading.
EY’s chief economist, Greg Daco, noted the stock market’s divide and its potential impact on consumer spending in an appearance on Bloomberg Radio on November 22nd. When asked about his opinions regarding the ‘K-shaped’ economy, which represents different outcomes and patterns of the affluent and less-affluent individuals and families, Daco commented that “we’re seeing a greater degree of polarization in terms of the different drivers of economic activity.” Daco also referred to his ‘A-Pillar’ economy, which is driven by AI, Asset Prices, and the Affluent, and warned that “there are downside risks if any of one these pillars starts breaking apart.”
According to him, optimism in AI and capital investment were supporting economic activity, which, when combined with rising valuations, supported a wealth effect that was “gradually supporting more spending by more affluent consumers.” However, as the less affluent were “less invested in the stock market,” any doubts about AI’s prospects or pullbacks in AI investment might lead to “a pullback in consumer spending activity,” he added.
Photo by Paolo Resteghini on Unsplash
Our Methodology
For our list of 12 Best Consumer Cyclical Stocks to Buy According to Analysts, we used a screener to shortlist the stocks catering to the consumer cyclical sector. We then sorted the list according to analyst upside potential and a rating of Buy or higher. We also added the hedge fund sentiment for each stock, as of Q3 2025, which was sourced from Insider Monkey’s database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
12. Carvana Co. (NYSE:CVNA)
Number of Hedge Fund Holders: 109
Average Upside Potential as of November 28: 12.00%
Carvana Co. (NYSE:CVNA) is one of the most well-known car retailers in the US. Its business model is fully online, and during the third quarter, the firm’s retail sales were 155.941 vehicles.
As of November 28th, out of the 24 analyst recommendations for Carvana Co. (NYSE:CVNA), seven were a Strong Buy, while 10 were Buy. Out of the remaining seven, six analysts had a Hold rating, while one had rated the stock at Underperform. The average share price target was $419.45.
One recent coverage for Carvana Co. (NYSE:CVNA) came from Wedbush on November 24th. It was striking as Wedbush upgraded the stock to Outperform and upgraded the share price target to $400 from an earlier $380. As part of the report, Wedbush outlined that it saw Carvana Co. (NYSE:CVNA)’s recent selloff as excessive. The firm also brought forward its estimate of the car retailer crossing CarMax in quarterly used-unit volumes. Wedbush now expects Carvana Co. (NYSE:CVNA) to cross CarMax in Q4 2026 earlier than the previous estimate that saw around mid-2027.
Carvana Co. (NYSE:CVNA)’s shares have gained 79% year-to-date. The firm presented at the Wells Fargo TMT Summit on November 14th. It outlined that it was targeting to sell three million vehicles annually over the next five to 10 years. Carvana Co. (NYSE:CVNA) had shared a similar estimate during its third-quarter earnings call. CEO Ernest Garcia remarked that “Q3 was another large step on the path to achieving our current goal of selling 3 million cars at a 13.5% adjusted EBITDA margin in the next 5 to 10 years.”
During the call, analysts also questioned Carvana Co. (NYSE:CVNA)’s management about the estimate. One question came from Needham’s Chris Pierece, who asked “how you came up with it, what drives it and what could pull it forward or push it back?”
In response, CEO Garcia remarked:
“Sure. I would say at a high level, the time lines we provided there were 5 to 10 years, which correspond to 2030 to 2035. And I think the fast end of that is approximately 40% compounded growth and the slow end of that is approximately 20% compounded growth. I think as a general matter, we view that as largely driven by our ability to continue to execute is probably the biggest determinant of that. There’s a lot of work that has to be done across the entire business to make sure that we’re buying cars, reconditioning cars, delivering cars to customer long leg and last mile, handling customer questions and just scaling the entirety of the business. So I think there’s a lot of work in there. And I think our execution is the primary driver that we think will dictate when we achieve that goal.”
11. The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Holders: 104
Average Upside Potential as of November 28: 13.01%
The Home Depot, Inc. (NYSE:HD) is one of the largest home improvement retailers in the US. The firm operates more than 2,300 stores across the US, Canada, and Mexico.
As of November 28th, 19 out of the 37 analyst recommendations for The Home Depot, Inc. (NYSE:HD) were a Buy. Out of the remaining 18, 14 were a Hold while four were a Strong Buy. The average share price target for The Home Depot, Inc. (NYSE:HD) was 403.36.
One recent analyst coverage for The Home Depot, Inc. (NYSE:HD)’s shares came on November 21st from Citigroup. It kept the shares’ rating on Buy but reduced the share price target to $407 from $422. The shift came after the firm’s latest earnings report, which saw it cut its full-year adjusted earnings forecast to a 5% dip from an earlier 2% drop. For its fiscal third quarter, The Home Depot, Inc. (NYSE:HD) reported $41.35 billion in revenue and $3.74 in adjusted earnings per share. While the firm’s revenue beat analyst estimates of $41.10 billion, the earnings missed their estimate of $3.84.
Some reasons management attributed to the profit cut were lower consumer spending, weaker demand for home improvement products, and fewer storms. During the call, after UBS’ Michael Lasser asked The Home Depot, Inc. (NYSE:HD)’s management whether home improvement demand could improve without lower interest rates or an uptick in housing activity, CEO Edward Decker replied:
“We’ve talked about all the different drivers of demand in our segment. And there are leads and lags in all of them, and we’ve clearly called out over time the most statistically relevant would be home price appreciation and household formation and housing turnover. Those three right now are pressured for sure. But we also know that we’ve more than worked our way through the pull forward of the COVID years. And there are many industry reports and calculations of now under spend per household. So on one hand, we’re looking at something as much as a $50 billion cumulative under spend in normal repair and remodel activity in U.S. housing. On the other hand, we have less turnover and home price appreciation.
So that tension is going to have to balance itself out as we work through the rest of this year and into next year. But fundamentally, our job is to put great value propositions in front of the customer and take share in any environment. So can The Home Depot grow? The answer is yes. Will the industry have some shorter-term pressures with turnover in home price? Yes, as well.”
