In this article, we will take a look at the 13 Best Consumer Discretionary Stocks To Buy Now.
Over the past year, the S&P 500 Consumer Discretionary Index has outperformed the S&P 500 Index, rising 16.98%. Companies in this sector of the stock market produce goods that consumers might not need but highly desire. As a result, unlike the consumer staples industry, companies that provide goods and services that are subject to discretionary expenditure can (and do) face significant swings in demand.
According to a New York Federal Reserve study, the cyclical sectors are benefiting from a reduction in inflation concerns among typical consumers as a result of President Trump’s decision to reverse some of his more aggressive trade policies. As markets rise on better optimism around trade, investors are growing more upbeat with a rising risk appetite.
While respondents did forecast food prices growing by 5.5% over the next year, a 0.4 percentage point increase from May and the highest since October 2023, the Fed survey revealed expectations were down across most price groups. In other areas, respondents saw gas price increases slowing to 2.7%, a decrease of 0.8 percentage points.
Employment also showed improvement, with those who anticipated losing their jobs in the next 12 months falling half a percentage point to 14.8%. Additionally, there was hope in other areas, as the likelihood of missing a minimum debt payment for the next three months dropped by half a point to 13.4%, the lowest level since January.
Our Methodology
To compile our list of the best consumer discretionary stocks to buy, we started with a list of U.S.-listed companies in the industry with strong fundamentals. We then ranked them according to the number of hedge funds that held stakes in them as of the first quarter of 2025.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
13. Darden Restaurants, Inc. (NYSE:DRI)
Number of Hedge Fund Holders: 36
Darden Restaurants, Inc. (NYSE:DRI) ranks among the best consumer discretionary stocks to buy now. Following solid quarterly results on June 20, Darden Restaurants, Inc. (NYSE:DRI) projects annual same-store sales above expectations, relying on demand from food delivery and marketing initiatives at its casual dining brands like Olive Garden.
Darden (NYSE:DRI) anticipates a 2% to 3.5% annual growth in same-store sales, with the midpoint of this range exceeding analysts’ projections of 2.64%. Additionally, initiatives like Olive Garden’s “buy one, take one” deals and home deliveries made possible by Uber Direct have further assisted the restaurant chain operator.
In addition, the company disclosed plans to explore strategic alternatives for its Bahama Breeze brand while also announcing a new $1 billion share repurchase program.
Darden Restaurants, Inc. (NYSE:DRI) is an American multi-brand restaurant operator headquartered in Orlando, Florida. Some of the most well-known and successful full-service dining brands can be found in Darden’s restaurant family, including Yard House, LongHorn Steakhouse, and Olive Garden.
12. Ulta Beauty, Inc. (NASDAQ:ULTA)
Number of Hedge Fund Holders: 42
Ulta Beauty, Inc. (NASDAQ:ULTA) ranks among the best consumer discretionary stocks to buy now. Loop Capital maintained its Buy rating on Ulta Beauty, Inc. (NASDAQ:ULTA) and increased its price target from $480 to $510 on June 16.
The increase followed Loop Capital’s latest pricing assessment on luxury beauty products, which revealed that Ulta Beauty’s prices are now only 0.5% higher than those of its competitors on average—a substantial improvement from the 11.6% premium noted in December.
Loop Capital also mentioned rising consumer sentiment as a benefit for Ulta Beauty, Inc. (NASDAQ:ULTA), pointing out that for the first time in six months, the University of Michigan’s preliminary consumer sentiment index rose in June. According to the firm, Ulta Beauty’s core “beauty enthusiast” customers, in particular, find beauty products to be less discretionary than many investors recognize.
Ulta Beauty, Inc. (NASDAQ:ULTA) is a speciality beauty retailer in the U.S. that operates more than 1,445 retail stores across 50 states. The company provides a variety of skincare, hair care, cosmetics, perfumes, and salon services.
11. Domino’s Pizza, Inc. (NYSE:DPZ)
Number of Hedge Fund Holders: 45
Domino’s Pizza, Inc. (NYSE:DPZ) ranks among the best consumer discretionary stocks to buy now. On June 17, BMO Capital Markets reaffirmed its $540 price target and Outperform rating for Domino’s Pizza, Inc. (NYSE:DPZ) after investor meetings with the company’s CFO and investor relations team.
Even in the face of difficult macroeconomic circumstances, Domino’s management has expressed optimism in the company’s prospects, continued growth in market share, and capacity to sustain business momentum beyond 2025. Specific information concerning the DoorDash partnership and Stuffed Crust goods was scarce, according to BMO Capital, and more details are anticipated during the second-quarter earnings report.
The firm further stated that the pizza chain doesn’t seem to face much risk from Middle East tensions. According to BMO Capital, Domino’s Pizza, Inc. (NYSE:DPZ) shares are reasonably priced, especially considering the possibility of similar sales growth in subsequent quarters.
Domino’s Pizza, Inc. (NYSE:DPZ) is a pizza company that operates through US stores, international franchises, and a supply chain segment.
10. Yum! Brands Inc. (NYSE:YUM)
Number of Hedge Fund Holders: 49
Yum! Brands Inc. (NYSE:YUM) ranks among the best consumer discretionary stocks to buy now. Redburn-Atlantic upgraded Yum! Brands Inc. (NYSE:YUM) from Neutral to Buy on June 10 while raising the stock’s price target from $145 to $177.
Chris Luyckx of Redburn-Atlantic cited Taco Bell’s outstanding performance and Yum! Brands’ strong global presence as major factors in the company’s success. Luyckx claims that Yum! Brands Inc. (NYSE:YUM) stands out in the industry owing to its growth potential and defensive resiliency. The analyst also noted that Taco Bell US and KFC International make significant contributions to the company’s EBIT.
Furthermore, Luyckx cited Yum! Brands’ strategic initiatives, which are expected to support the company’s growth trajectory. These include its diverse restaurant formats, its robust master franchise system, and its digital acceleration program, Byte.
Yum! Brands Inc. (NYSE:YUM) is an American multinational fast food corporation that operates well-known brands like KFC, Taco Bell, Pizza Hut, and The Habit Burger Grill.
9. Ross Stores, Inc. (NASDAQ:ROST)
Number of Hedge Fund Holders: 50
Ross Stores, Inc. (NASDAQ:ROST) ranks among the best consumer discretionary stocks to buy now. JPMorgan raised its price target for Ross Stores, Inc. (NASDAQ:ROST) from $141 to $154 on June 13 while maintaining its Overweight rating on the company’s shares. The firm mentioned the possibility of increased traffic and comparable store sales growth after a meeting with the company’s executive team.
Ross Stores, Inc. (NASDAQ:ROST) is putting a new marketing and in-store experience strategy into action. The retailer intends to begin early marketing campaigns in July/August and hopes to have refreshed the entirety of its chain of stores by the end of fiscal year 2026, which management believes could lead to same-store sales growth of more than 3-4%.
Ross Stores, Inc. (NASDAQ:ROST) demonstrated sequential comparable sales gains at the end of the first quarter, especially in March and April, according to JPMorgan. Based on the firm’s “healthy” second-quarter guidance of up to 3% growth, the company’s historical pattern points to a possible 300 basis point two-year stack acceleration compared to the first quarter.
Ross Stores, Inc. (NASDAQ:ROST) is a discount clothing retailer that runs home fashion stores under the DD’s Discount and Ross Dress for Less (Ross) brands. Along with footwear, accessories, and home fashion, the company’s outlets offer customers cheap in-season designer and name-brand clothing.
8. Royal Caribbean Cruises Ltd. (NYSE:RCL)
Number of Hedge Fund Holders: 57
Royal Caribbean Cruises Ltd. (NYSE:RCL) ranks among the best consumer discretionary stocks to buy now. While retaining their Buy rating, Stifel analysts raised their price target for Royal Caribbean Cruises Ltd. (NYSE:RCL) shares from $275 to $310 on June 4. The update came in response to insights gained at the firm’s annual Cross Sector Insights Conference, which was attended by Royal Caribbean’s management team, including IR representative Blake Vanier, CFO Naftali Holtz, and CEO Jason Liberty.
The analysts noted that bookings and demand remain strong despite a decrease in cruise demand. While some investors have expressed concerns about potential drops in demand, which may be brought on by increased marketing efforts or changes in bookings, the management of Royal Caribbean Cruises Ltd. (NYSE:RCL) expressed optimism that the company will continue to see substantial demand in the second part of 2025 as well as 2026.
Royal Caribbean Cruises Ltd. (NYSE:RCL) is a global cruise company that operates under the Royal Caribbean International, Celebrity Cruises, and Silversea Cruises brands, among others, and offers a wide range of itineraries.
7. Airbnb, Inc. (NASDAQ:ABNB)
Number of Hedge Fund Holders: 66
Airbnb, Inc. (NASDAQ:ABNB) ranks among the best consumer discretionary stocks to buy now. Despite recognizing Airbnb, Inc. (NASDAQ:ABNB)’s higher valuation than its rivals, Bernstein SocGen Group maintained its Outperform rating and $165 price target for the company on June 18.
Bernstein noted that full-year GAAP profit before tax margins are now about the same for Airbnb, Inc. (NASDAQ:ABNB) and its rivals, and that first-quarter results are seasonally skewed. The firm added that Airbnb’s somewhat higher consensus growth projection of 17% and higher free cash flow conversion of 28% support its valuation premium, indicating that the company is well priced according to current estimates.
Bernstein’s optimism stems from its belief that, despite first-quarter growth of 11% when accounting for calendar effects and potential acceleration from core markets, non-core segments, and new verticals, Airbnb’s multiple is primarily driven by expected mid-term revenue growth rates, which the consensus currently places at about 9.5%.
San Francisco-based Airbnb, Inc. (NASDAQ:ABNB) runs an online marketplace that links homeowners with travelers seeking accommodation.
6. Tapestry, Inc. (NYSE:TPR)
Number of Hedge Fund Holders: 73
Tapestry, Inc. (NYSE:TPR) ranks among the best consumer discretionary stocks to buy now. On June 17, Bernstein SocGen Group reaffirmed its $100 price target and Outperform rating for Tapestry, Inc. (NYSE:TPR), pointing to the company’s Coach brand’s steady growth.
Following meetings with the CEO and CFO of Tapestry, Inc. (NYSE:TPR), the firm identified five key indicators that contributed to the continued success of the Coach brand. Based on the company’s polls of thousands of American consumers, Bernstein observed that Coach has been effective in drawing in and keeping younger customers, indicating longevity for the brand’s equity.
Bernstein noted that rather than “buying growth,” Coach is exhibiting good brand health measures, citing rising average pricing, low markdowns, and limited product availability.
Tapestry, Inc. (NYSE:TPR) is an American multinational fashion holding company that owns a number of leading fashion brands, particularly Coach, Kate Spade New York, and Stuart Weitzman. With its headquarters in New York, the company offers its products both directly and indirectly through licensing and wholesale companies.
5. The TJX Companies, Inc. (NYSE:TJX)
Number of Hedge Fund Holders: 77
The TJX Companies, Inc. (NYSE:TJX) ranks among the best consumer discretionary stocks to buy now. On June 18, Bernstein SocGen Group maintained its $145 price target and Outperform rating on The TJX Companies, Inc. (NYSE:TJX). According to the firm, TJX is “one of the few macro-proof US retail names this year” .
Bernstein remained optimistic regarding TJX’s supply availability, pointing out that it hasn’t accumulated inventory to protect itself against supply or tariff concerns, in contrast to its off-price peers. In order to get better prices and respond to demand instantly, management has urged customers to make purchases closer to the time of need.
Bernstein cited TJX’s robust purchasing structure, size, vendor connections, and ability to concentrate on expanding markets like beauty as reasons for the company’s optimism over supply availability this year.
Bernstein predicts that TJX’s earnings growth will stay comfortably over 10% over the medium term due to increases in comparable store sales, prospects for development, and potential for a gross margin increase.
The TJX Companies, Inc. (NYSE:TJX) is a well-known off-price clothing and home fashion retailer. Its store brands include the likes of T.J. Maxx, Marshalls, and HomeGoods, as well as international names such as T.K. Maxx and Winners.
4. Chipotle Mexican Grill, Inc. (NYSE:CMG)
Number of Hedge Fund Holders: 78
Chipotle Mexican Grill, Inc. (NYSE:CMG) ranks among the best consumer discretionary stocks to buy now. On June 18, TD Cowen reaffirmed its Buy rating and $57 price target for Chipotle Mexican Grill, Inc. (NYSE:CMG), stating that it is confident in the company’s strategy despite the challenges affecting the industry.
In contrast to consensus expectations of 0.8% and 4.4% for 2025 and 2026, respectively, the research firm stuck to its same-store sales projections of 0.6% and 5.0%. According to TD Cowen, Chipotle Mexican Grill, Inc. (NYSE:CMG) is taking the right steps to boost short-term traffic and reach $4 million in sales volumes.
Instead of execution issues, TD Cowen blames Chipotle’s recent sales slowdown on challenging macroeconomic conditions. The endorsement is further proven by Chipotle being the firm’s “#3 pick” and preferred large-cap name in the restaurant industry.
Chipotle Mexican Grill, Inc. (NYSE:CMG) is a fast-casual restaurant chain that specializes in Mexican-inspired food, including salads, bowls, tacos, and burritos. The restaurant chain runs more than 3,500 outlets across the US, Canada, Europe, and the Middle East.
3. DoorDash, Inc. (NYSE:DASH)
Number of Hedge Fund Holders: 81
DoorDash Inc. (NASDAQ:DASH) ranks among the best consumer discretionary stocks to buy now. On June 12, Citizens JMP maintained its Market Outperform rating on DoorDash Inc. (NASDAQ:DASH), while increasing the price target to $235 from $225.
The increase comes follows DoorDash, Inc. (NYSE:DASH) acquiring Symbiosys, an AI-powered advertising platform, for $175 million and introduced new AI-powered advertising solutions for merchants and brands. Additionally, DoorDash disclosed that its advertising division generated $1 billion in revenue last year, indicating the company’s strategic emphasis on growing this revenue stream.
According to Citizens JMP, DoorDash’s global advertising income in 2024 was over $950 million, reflecting a 1.2% penetration rate, though this remains less than the 2% level attained by rival Uber’s Eats restaurant division.
One of the largest online food delivery companies in the United States, DoorDash, Inc. (NYSE:DASH) operates a delivery platform based in San Francisco, California. Historically, the company has categorized itself into five business segments: platform services, advertising, non-restaurant services, international restaurants, and US restaurants.
2. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 81
Nike, Inc. (NYSE:NKE) ranks among the best consumer discretionary stocks to buy now. Due to persistent deterioration in brand momentum and a slower-than-anticipated recovery, Needham analysts reduced their target price for Nike, Inc. (NYSE:NKE) from $75 to $66 on June 18, though the firm retained its Buy rating on the company’s shares.
While Nike’s earnings per share were previously projected to be $1.75 and $2.42, however, Needham has now reduced the forecasts for fiscal years 2026 and 2027 to $1.52 and $2.15, respectively. According to the firm’s updated forecast, the reduced price target represents a valuation of around 30 times the anticipated EPS for fiscal year 2027.
According to Needham’s analysis, US direct-to-consumer credit card transactions are continuing to fall by double digits, and online search trends are becoming worse. Given the broader challenges, the broker believes risk-reward is skewed negatively, although Needham projects a slight upside to EPS due to Nike’s usually conservative guidance for the approaching fourth-quarter earnings. With all that said, the firm continues to endorse Elliott Hill’s strategy as the new CEO of Nike, Inc. (NYSE:NKE), despite short-term worries.
Nike, Inc. (NYSE:NKE) is the largest retailer of sportswear and footwear in the world. The company develops, manufactures, markets, and sells clothing, accessories, equipment, and footwear across the globe.
1. Booking Holdings Inc. (NASDAQ:BKNG)
Number of Hedge Fund Holders: 102
Booking Holdings Inc. (NASDAQ:BKNG) ranks among the best consumer discretionary stocks to buy now. With a price target of $5,077, Piper Sandler reaffirmed its Neutral rating on Booking Holdings Inc. (NASDAQ:BKNG) on June 18 following recent management meetings with company executives.
As a means to explore different facets of the company’s operations and strategy, the investment firm’s analyst team met with Grace Lee, SVP of Investor Relations and FP&A at Booking Holdings Inc. (NASDAQ:BKNG), and Mike Reilly, Senior Director of IR and FP&A. The expansion of alternative accommodations, the macroeconomic climate, artificial intelligence projects, marketing effectiveness, and the competitive landscape in the internet travel industry were among the main subjects discussed during these talks.
Although Piper Sandler remained neutral regarding the larger online travel sector, it did concede that Booking Holdings Inc. (NASDAQ:BKNG) “remains best positioned given endmarket exposure and solid execution” in comparison to its competitors.
Booking Holdings Inc. (NASDAQ:BKNG) offers traditional and online reservations for restaurants and travel, as well as associated services in the US, the Netherlands, and other countries.
While we acknowledge the potential of BKNG to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than BKNG and that has 100x upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.
