The US Supreme Court, on February 20, struck down Donald Trump’s sweeping tariffs in a 6-3 decision authored by conservative Chief Justice John Roberts. In response, Trump lashed out at the justices who voted against him and announced a 10% global tariff, under a different legal authority, “over and above our normal tariffs already being charged.”
The market had mixed reactions to this decision, with some thinking that this landmark ruling would provide relief to the industries most heavily affected by the tariffs. Chris Beauchamp, Chief Market Analyst at IG Group, had this to say:
”You’re looking at, obviously, a whole host of industrial stocks, importers, consumer discretionary that’s going to be importing plenty of stuff from overseas. And that could mean that they will have some relief to bring down prices if and when—as I say, it’s an unclear situation—if and when the tariffs are firmly unwound and the order comes through.”
Rob Burdett from Nedgroup Investments had similar thoughts:
”For equities, the ruling against the tariffs is widely expected to lift US and global equities. Relief from trade uncertainty may act as a tailwind for cyclicals and import‑dependent sectors such as IT hardware (including semiconductors, although they will most likely be included in sectoral tariffs) retail and industrials.”
Despite the potential benefits, some analysts are worried that the lack of clarity on key questions could create a significant overhang on markets. One of those questions is on the eligibility for tariff refunds, as mentioned by Eric Merlis, co-head of global markets at Citizens:
”The Supreme Court’s 6–3 ruling against the Trump administration on tariffs sparked an immediate knee jerk rally in the euro. However, the decision stopped short of clarifying eligibility for tariff refunds, leaving a key source of uncertainty intact.”
Phil Blancato, Chief Market Strategist at Osaic, echoed these sentiments regarding refunds:
”Lastly, the question of who has paid for the tariffs, U.S. companies, consumers, or foreign exporters, will come to the forefront on who deserves the repayment from the government.”
Another key question is how the Trump administration would replace the tariff revenue, as mentioned by Tom Graff, Chief Investment Officer at Facet:
”Longer-term, there will be two big questions: How does the government replace the tariff revenue? Without it, the deficit will be much higher than current, and this could create significant pressure on Treasury yields.”
Given the potential short-term uplift for consumer companies, let us now take a look at the 14 best consumer discretionary stocks to buy right now.
Our Methodology
We filtered consumer discretionary stocks in the US market with a market capitalization of at least $2 billion, at least 3 analysts covering them, and a median projected upside of at least 5%. We then filtered the list to only contain stocks with at least 15 hedge fund holders, according to Insider Monkey’s proprietary hedge fund database, which tracks 978 hedge funds as of Q3 2025. Finally, we selected the 14 stocks with the most hedge fund holders. When two or more stocks were tied among hedge fund holders, we used the median analyst-provided projected upside as the tiebreaker.
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).
Note: All data presented are as of 20 February 2026, market close.
14. Etsy Inc. (NASDAQ:ETSY)
Number of Hedge Fund Holders: 46
Etsy Inc. (NASDAQ:ETSY) is one of the 14 Best Consumer Discretionary Stocks to Buy Right Now.
Truist, on February 20, raised its target price on Etsy by 3.8% to $83 (from $80) and retained its Buy recommendation. The firm thinks that Etsy, following the release of the company’s Q4 2025 results and Q1 2026 guidance, is making solid progress towards positive gross merchandise sales (GMS) growth through improvements in search, AI-powered recommendations, marketing efficiency, and greater focus on app usage.
Etsy released its Q4 2025 results on February 19, which were headlined by an acceleration in revenue growth to 6.6% YoY (from 0.9% YoY in Q3). Revenue growth was driven primarily by a recovery in GMS growth, combined with an improvement in the company’s take rate.
Comparable GMS (excludes prior year figures from Reverb, which Etsy divested from last April 2025) grew 2.4% YoY to $3.6 billion (vs. 0.9% YoY in Q3). The mobile app played a large role in this improvement, with mobile app GMS growing 6.6% YoY (vs. 5.0% YoY in Q3). The US market was another point of interest, posting positive growth for the first time since Q4 2021.
Etsy’s take rate expanded 170 basis points YoY to 24.5% (from 22.8%). The divestiture of Reverb accounted for approximately half of this improvement. Ad revenue and other ancillary revenue contributed the rest.
Etsy Inc. (NASDAQ:ETSY) operates an online marketplace for handmade products, like shoes, clothes, bags, and accessories. The company is based in New York, New York, and was founded in 2005.
13. Rollins Inc. (NYSE:ROL)
Number of Hedge Fund Holders: 48
Rollins Inc. (NYSE:ROL) is one of the 14 Best Consumer Discretionary Stocks to Buy Right Now.
Morgan Stanley, on February 14, trimmed its target price on Rollins by 2.9% to $70 (from $72), but kept its Overweight call. This change in target comes a couple of days after Rollins released its Q4 2025 earnings, on February 11, which showed organic revenue growth of 5.7%, missing expectations, due to poor weather in the quarter.
In the same report, Rollins’s management provided both its short-term and medium-term financial outlook. For revenue, they expect 9% to 11% YoY growth in 2026 (vs. a 12% average over the last three years), broken down as follows: 7% to 8% YoY organic growth and 2% to 3% YoY M&A growth. In the medium-term, management is aiming for above-market organic growth, supplemented by M&A growth.
As for profitability, management is aiming to improve its EBITDA margin by 2 to 7 percentage points, bringing margins to 25% to 30% by the end of 2026 (vs. an average of 23% over the past three years). The target becomes even more aggressive in the medium term, with management aiming for EBITDA margins of 30% to 35%.
Rollins Inc. (NYSE:ROL) is an international service company that provides pest and termite control services to residential and commercial customers. The company is based in Atlanta, Georgia, and was founded in 1948 by John W. Rollins Jr. and O. Wayne Rollins Sr.
12. Wynn Resorts Limited (NASDAQ:WYNN)
Number of Hedge Fund Holders: 51
Wynn Resorts Limited (NASDAQ:WYNN) is one of the 14 Best Consumer Discretionary Stocks to Buy Right Now.
Wells Fargo analyst Trey Bowers, on February 13, trimmed its target price on Wynn Resorts by 3.3% to $147 (from $152), but retained its Overweight call on the stock. The firm attributed its decision to reduce the target price to weaker-than-expected hold levels across all of Wynn Resorts’ major regions. This caused the company’s EBITDA, which would have been inline otherwise, to miss Wells Fargo’s estimate. Nonetheless, the firm still likes the company’s growth outlook in the years to come, thereby justifying the retained Overweight rating.
This research update from Wells Fargo comes a day after Wynn Resorts released its Q4 2025 earnings on February 12. Q4 report showed that the company missed earnings expectations, with its attributable net income falling 63.9% YoY to $100.0 million. Adjusted Property EBITDAR, which is the company’s preferred KPI, told a similar (albeit less drastic) story, declining 8.1% YoY to $568.8 million.
Slow revenue growth (1.5% YoY) relative to cost growth (8.3% YoY), leading to margin contraction, is to blame for this miss. Room revenue was the biggest culprit, as a decline in average daily rate in the Macau properties (between 10% to 26% YoY) combined with lower occupancy % in the Las Vegas properties (~3% points) caused room revenue to fall 6.2% YoY. Casino revenue also suffered, as the hold rates (which are the % of total bets that the company retains or “wins”) declined across all of Wynn Resorts’ locations.
Despite the disappointing Q4, the company’s long-term growth story is intact, especially as the completion of the Wynn Al Marjan Island nears. Management says that this new site is on track for an early 2027 opening.
Wynn Resorts Limited (NASDAQ:WYNN) owns and operates integrated resorts and casinos in Las Vegas, Macau, London, and Massachusetts. The company is based in Las Vegas, Nevada, and was founded in 2002 by Stephen Alan Wynn, Elaine P. Wynn, and Kazuo Okada.
11. Las Vegas Sands Corp. (NYSE:LVS)
Number of Hedge Fund Holders: 58
Las Vegas Sands Corp. (NYSE:LVS) is one of the 14 Best Consumer Discretionary Stocks to Buy Right Now.
On February 11, Morgan Stanley trimmed its target price on Las Vegas Sands by 1.5% to $66 (from $67), but kept its Equal Weight call on the stock. The firm cited better-than-expected results in the company’s Singapore operations (which were offset by weaker-than-expected Macau results) following the release of Sands’s Q4 2025 earnings as the trigger for this target price change.
Sands released its Q4 2025 results on January 28, which were headlined by a 49.6% YoY increase in the company’s adjusted attributable net income to $579 million (from $387 million). On a diluted share basis, earnings grew even faster, at 57.4% YoY, to $0.85 (from $0.54), as the company repurchased $500 million worth of common stock (~1.2% of outstanding shares) during the 4th quarter.
The strong earnings growth was driven primarily by growth in the company’s Singapore operations (Marina Bay Sands). Adjusted property EBITDA grew 50.1% YoY to $806 million (from $537 million). This outperformance was driven primarily by gambling volume growth and EBITDA margin expansion (+310 basis points YoY to 50.3%), supplemented by positive hold variance (actual hold % of 4.36% vs. expected hold % of 3.90%).
Macao operations, meanwhile, lagged. Adjusted property EBITDA grew 6.5% YoY to $608 million (from $571 million). The underperformance was driven primarily by weaker gambling volume and a contraction in EBITDA margin (-270 basis points YoY to 29.5%), partially offset by positive hold variance (actual hold % of 3.92% vs. expected hold % of 3.30%).
Las Vegas Sands Corp. (NYSE:LVS) is a destination property developer, operating in Macao (The Venetian Macao, The Londoner Macao, Parisian Macao, The Plaza Macao, Four Seasons Macao, and Sands Macao) and Singapore (Marina Bay Sands). The company is based in Las Vegas, Nevada, and was founded in August 2004 by Gary Adelson.
10. Ralph Lauren Corporation (NYSE:RL)
Number of Hedge Fund Holders: 58
Ralph Lauren Corporation (NYSE:RL) is one of the 14 Best Consumer Discretionary Stocks to Buy Right Now.
BTIG analyst Bob Drbul, on February 6, raised the firm’s target price on Ralph Lauren by 8.8% to $435 (from $400) and reiterated his Buy recommendation on the stock. He likes the margin expansion, which the company exhibited in Q3 FY2026, both on an operating level (+220 basis points to 20.9%) and a gross level (+150 basis points). The margin expansion was driven by a more favorable product mix and cheaper cotton costs, which more than offset the negative impact from higher US tariffs.
This research update from BTIG comes just a day after Ralph Lauren released its Q3 FY2026 earnings on February 5. The results were headlined by net income growth of 21.6% YoY to $361.6 million (from $297.4 million). On a per-diluted-share basis, earnings grew slightly faster, at 24.9% YoY, to $5.82 (from $4.66).
The strong earnings growth was primarily driven by double-digit revenue growth and margin expansion. Revenue grew 12% YoY, with Asia being the fastest-growing segment (22% YoY). Gross profit margin, meanwhile, improved by 150 basis points YoY to 69.9%. Margin expansion was caused by average selling price growth (in the high-teens), more favorable product mix, and lower cotton prices, which more than offset the negative impact of new US tariffs.
Ralph Lauren Corporation (NYSE:RL) designs, markets, and distributes luxury lifestyle products in the apparel, footwear, accessories, home, fragrances, and hospitality categories across North America, Europe, and Asia under the Ralph Laurent brand. The company is based in New York, New York, and was founded in 1967 by Ralph Lauren.
9. Amer Sports Inc. (NYSE:AS)
Number of Hedge Fund Holders: 63
Amer Sports Inc. (NYSE:AS) is one of the 14 Best Consumer Discretionary Stocks to Buy Right Now.
On February 10, UBS increased its target price on Amer Sports by 3.4% to $60 (from $58), retaining its Buy recommendation on the stock ahead of the release of the company’s Q4 2025 earnings (which is scheduled for February 24). The firm thinks Amer Sports will likely meet Q4 earnings expectations, seeing no compelling reason for either a positive or negative surprise.
This update marks the second straight month that UBS raised its target price on Amer Sports. On January 8, the firm already increased the target to $58 (from $54), citing a more resilient US consumer as well as an underappreciated “Health & Wellness 2.0” trend.
For reference, Amer Sports’ management provided its most recent full-year 2025 guidance on November 18. They expect revenue to grow 23% to 24% YoY, led by the technical apparel (26% to 27% YoY) and outdoor performance (28% to 29% YoY) segments. They are targeting gross margins of 58% and operating margins of 12.5% to 12.7%, yielding full-year diluted earnings per share of $0.88 to $0.92.
Amer Sports Inc. (NYSE:AS) manufactures, markets, and sells sports equipment, apparel, and footwear for the Technical Apparel, Outdoor Performance, and Ball and Racquet Sports segments. The company is based in Helsinki, Finland, and was founded in January 2020.
8. Expedia Group Inc. (NASDAQ:EXPE)
Number of Hedge Fund Holders: 63
Expedia Group Inc. (NASDAQ:EXPE) is one of the 14 Best Consumer Discretionary Stocks to Buy Right Now.
Baird, on February 13, slightly increased its target price on Expedia by 0.7% to $282 (from $280) and retained its Outperform call on the stock. This price update comes as the firm updated its model following better-than-expected 4th-quarter 2025 results.
Expedia released its Q4 2025 results on February 12, which were headlined by a 51.7% YoY increase in adjusted attributable net income to $478 million (from $315 million). On a per diluted share basis, earnings grew 58.2% YoY to $3.78 (from $2.79). For reference, the street consensus for adjusted EPS was $3.37. This earnings beat was driven by double-digit lodging gross booking growth (primarily from the B2B segment) and margin expansion.
Lodging gross bookings grew 13% YoY to $27.0 billion (from $24.4 billion), as more room nights were booked (9.3% YoY increase to 94 million) at a higher average daily rate (4.0% YoY to $207). The majority of the growth came from the B2B market, which saw gross bookings and revenue growth of 24.3% YoY and 30.0% YoY, respectively. B2C lagged, growing in the mid-to-low single digits.
Cost levels, meanwhile, improved across the company’s cost structure. Cost of revenue (as a % of revenue) declined 77 basis points YoY to 9.6%, marketing spend % fell 48 basis points YoY to 4.6%, while overhead % fell 214 basis points YoY to 18.1% due to economies of scale.
Expedia Group Inc. (NASDAQ:EXPE) is an online travel company that provides travel products and services across the B2C, B2B, and Trivago segments. The company is based in Seattle, Washington, and was founded in 1994.
7. DraftKings Inc. (NASDAQ:DKNG)
Number of Hedge Fund Holders: 68
DraftKings Inc. (NASDAQ:DKNG) is one of the 14 Best Consumer Discretionary Stocks to Buy Right Now.
Jefferies analyst David Katz, on February 15, reduced his target price on DraftKings by 8.0% to $46 (from $50) but kept the firm’s buy recommendation on the stock. The company’s conservative guidance in 2026, which David says includes several new product development and new location launch costs that will not immediately contribute to revenue, is one of the reasons for this change in target price.
He, however, thinks that the decline in the company’s share price (which has fallen ~35% to 40% year-to-date) is nearing its end. On an industry level, he thinks that US sports betting demand will continue to grow at its current pace, with DraftKings remaining as one of the industry leaders.
This update from Jefferies comes on the heels of the release of DraftKings’ Q4 2025 results on February 12. The company delivered $136.4 million in attributable net income, coming from a net loss of $135.9 million in Q4 2024. This swing was driven by higher sportsbook volume (+12.3% YoY) and improving hold rates (+250 basis points YoY), which led to a 63.8% YoY increase in sportsbook revenue.
Despite the strong results, investors were disappointed by management’s 2026 guidance. Management expects $6.5 billion to $6.9 billion in new revenue (vs. the consensus of $7.29 billion), which would yield an EBITDA increase of $700 million to $900 million. Management said that their forecast took into account expected investment in developing new products (DraftKings Predictions) and entry into new jurisdictions. Both of these activities will require high costs and will likely not contribute to revenue immediately in 2026.
DraftKings Inc. (NASDAQ:DKNG) is a gaming company that provides online sports betting, online casino, and fantasy sports products. The company is based in Boston, Massachusetts, and was founded in December 2011 by Jason Robins, Matthew Kalish, and Paul Liberman.
6. Airbnb Inc. (NASDAQ:ABNB)
Number of Hedge Fund Holders: 71
Airbnb Inc. (NASDAQ:ABNB) is one of the 14 Best Consumer Discretionary Stocks to Buy Right Now.
On February 17, DA Davison analyst Tom White trimmed his target price on Airbnb by 3.2% to $150 (from $155) but kept the firm’s Buy recommendation on the stock. Market-wide valuation multiples compression due to AI concerns from investors was the main driver of this target price change, overshadowing an otherwise solid 4th quarter from Airbnb across all key financial measures and operating metrics.
Airbnb released its Q4 2025 results on February 12, which showed strong results across the board. Revenue grew 12.0% YoY, as more room nights were booked (9.8% YoY increase) at a slightly higher average daily rate (5.9% YoY increase). Adjusted EBITDA, meanwhile, increased 2.7% YoY.
Despite the solid results, AI remained the number one concern for both management and investors. Analysts had numerous AI-related questions. Richard Clarke from AB Bernstein asked about the potential impact of AI bots:
“AI is the topic du jour, and you gave some helpful remarks about why the AI bots today can’t match what Airbnb do. But given the sort of speed of innovations going on, why do you think those AI platforms couldn’t launch a short-term rental platform over time? … Do you see any risks that you’ll have to share your economics with a AI platform at some point going forward? Or do you expect you’ll be able to retain the same level of direct traffic you have today in an AI world?”
Lee Horowitz from Deutsche Bank Research, meanwhile, wanted to know about the impact of AI on Airbnb’s ad revenue:
“You’ve talked about how AI search will preclude your deployment of sponsored ads. Can you maybe just unpack that a bit more and explain how AI search particularly may help you bring sponsored ads to market a bit more quickly?”
Brian Chesky, Chairman, CEO, and Co-Founder of Airbnb, dedicated an entire section of his presentation to AI during the analyst briefing. According to him, the company’s custom AI customer support agent is already resolving a third of support issues without any help from live specialists, with significantly quicker resolution times. Airbnb has also brought in Ahmad Al-Dahle, who led Meta’s generative AI team that built the Llama model, as its CTO. He will be in charge of building an AI-native user experience.
Airbnb Inc. (NASDAQ:ABNB) operates an online marketplace for rooms that connects hosts and guests. The company is based in San Francisco, California, and was founded in 2007 by Brian Chesky, Nathan Blecharczyk, and Joseph Gebbia.
5. O’Reilly Automotive Inc. (NASDAQ:ORLY)
Number of Hedge Fund Holders: 75
O’Reilly Automotive Inc. (NASDAQ:ORLY) is one of the 14 Best Consumer Discretionary Stocks to Buy Right Now.
On February 9, Morgan Stanley trimmed its target price on O’Reilly Automotive by 1.8% to $108 (from $110), while keeping its Overweight call on the stock. This price target update was a result of the firm reducing its 2026 and 2027 EPS forecasts for ORLY by 4% and 3.5%, respectively, due to rising cost pressures (specifically medical and casualty self-insurance costs), which were evident in the company’s 4th quarter results.
O’Reilly released its Q4 2025 earnings report on February 4, which showed 9.8% YoY growth in net income to $605.2 million (from $551.1 million). On a per diluted share basis, earnings grew 12.7% YoY to $0.71 (from $0.63). Earnings growth was driven primarily by sales growth, which offset a slight uptick in costs.
Sales grew 7.8% YoY to $4.4 billion (from $4.1 billion). Growth was balanced, with 5.6% coming from same-store sales growth. The rest of the growth came from store count expansion, with 207 net store additions YoY, bringing the company’s total store footprint to 6,585 (from 6,378).
The uplift from sales offset the 80-basis point YoY erosion in operating profit margins (from 18.8% to 18.0%). 50 out of the 80-basis-point contraction came from an uptick in cost of sales (from 51.3% of sales to 51.8%). The rest came from higher selling, general, and administrative expenses (from 33.0% of sales to 33.3%), specifically from higher team member health care and casualty claim costs.
Management also provided its guidance for 2026. They expect 225 to 235 net store additions and 3.0% to 5.0% YoY growth in same-store sales, which would yield revenue growth of around 5.2% to 6.9%. This revenue growth would bring full-year revenue to $18.7 billion to $19.0 billion. Management is targeting gross profit margins of 51.5% to 52.0% and operating profit margins of 19.2% to 19.7%, resulting in diluted earnings per share of $3.10 to $3.20.
O’Reilly Automotive Inc. (NASDAQ:ORLY) is a retail outlet operator engaged in the distribution and retail of automotive aftermarket parts, equipment, supplies, and accessories. The company is based in Springfield, Missouri, and was founded in November 1957 by Charles F. O’Reilly and Charles H. O’Reilly.
4. DoorDash Inc. (NASDAQ:DASH)
Number of Hedge Fund Holders: 91
DoorDash Inc. (NASDAQ:DASH) is one of the 14 Best Consumer Discretionary Stocks to Buy Right Now.
Citi analyst Ronald Josey, on February 20, trimmed his target price on DoorDash by 1.1% to $280 (from $283). Despite the slight adjustment in the target price, Ronald retained his Buy recommendation for the stock. He also reiterated that DoorDash remains the firm’s top pick in the internet sector, citing better-than-expected 4th-quarter performance that Ronald expects to improve throughout 2026.
This update comes on the heels of the release of DoorDash’s Q4 2025 earnings on February 18, which were headlined by rapid earnings growth across all profitability measures. GAAP attributable net income grew 51.1% YoY to $213 million (from $141 million). On a per diluted share basis, GAAP earnings grew 45.5% YoY to $0.48 (from $0.33). Adjusted EBITDA increased 37.8% YoY to $780 million (from $566 million).
The rapid earnings growth was driven primarily by 37.7% YoY revenue growth to $4.0 billion (from $2.9 billion), as a larger user base led to higher order volume and slightly larger average order sizes.
Total orders grew 31.8% YoY to 903 million (from 685 million), as monthly active users grew 33.3% to 56 million (from 42 million). Average basket size, meanwhile, saw a slight increase of 5.9% YoY to $32.9 per order (from $31.06 per order). Combined, these two factors led to a 39.5% YoY growth in marketplace gross order value to $29.7 billion (from $21.3 billion).
Management also provided its guidance for the 1st quarter. They expect the marketplace gross order value to reach $31.0 billion to $31.8 billion, which would yield $675 million to $775 million in adjusted EBITDA.
DoorDash Inc. (NASDAQ:DASH) operates a food delivery and logistics platform, serving consumers in the US, Canada, and Australia. The company is based in San Francisco, California, and was founded in January 2013 by Andy Fang, Tony Xu, Stanley Tang, and Evan Moore.
3. Booking Holdings Inc. (NASDAQ:BKNG)
Number of Hedge Fund Holders: 95
Booking Holdings Inc. (NASDAQ:BKNG) is one of the 14 Best Consumer Discretionary Stocks to Buy Right Now.
On February 20, JPMorgan reduced its target price on Booking Holdings by 10.4% to $5,600 (from $6,250), while maintaining its Overweight rating. This price update comes after Booking Holdings released its Q4 results, which the firm described as “strong” and its outlook as “encouraging”. It also thinks that management’s guidance could have some upside, given the company’s multi-year track record and additional savings from its “Transformation Program”.
This research update comes a couple of days after Booking Holdings released its Q4 earnings report on February 18, which showed rapid earnings growth across both GAAP and non-GAAP measures. GAAP net income and GAAP earnings per share grew 34% YoY (to $1.4 billion) and 38% YoY (to $44.22 per share), respectively. On non-GAAP metrics, adjusted EBITDA and adjusted earnings per share grew 19% YoY (to $2.2 billion) and 17% YoY (to $48.80 per share), respectively.
The rapid earnings growth was driven by both revenue growth and profit margin expansion. Revenue grew 16% YoY to $6.3 billion, as more room nights were booked (9% YoY growth to 285 million) at higher average daily rates (6% YoY growth to $151 per night). Net income margins, meanwhile, improved 300 basis points YoY to 22.5%, as the company’s “Transformation Program” enabled ~$550 million in annualized run-rate savings.
Booking Holdings Inc. (NASDAQ:BKNG) provides online travel and related solutions through its brands: Booking.com, Priceline, Agoda, KAYAK, and OpenTable. The company is based in Norwalk, Connecticut, and was founded in July 1997 by Jay Scott Walker.
2. The Home Depot Inc. (NYSE:HD)
Number of Hedge Fund Holders: 104
The Home Depot Inc. (NYSE:HD) is one of the 14 Best Consumer Discretionary Stocks to Buy Right Now.
Bernstein, on February 18, increased its target price on Home Depot by 5.2% to $381 (from $362) and kept its Market Perform call on the stock. This price update comes ahead of the scheduled release of Home Depot’s Q4 2025 earnings on February 24. The firm is tempering its expectations, reducing its Q4 same-store sales growth forecast by 40 to 50 basis points to reflect the recent snowstorm, which is likely to have negatively affected homebuilding and improvement activity.
The weaker Q4 2025 same-store sales growth can already be seen in the earnings release of Home Depot’s competitors. Floor & Décor Holdings, which released its results on February 19, saw its same-store sales decline by 4.8% YoY. Brad Paulsen, Floor & Décor’s Chief Executive Officer, blamed the “softness in existing home sales activity” for this decline.
Builders FirstSource, which released its 4th-quarter results on February 17, reported a 13.0% YoY decline in core organic net sales. The multi-family and single-family segments showed the biggest falls of 20.4% YoY and 15.4% YoY, respectively.
The Home Depot Inc. (NYSE:HD) is a home improvement specialty retailer, with 1,200+ stores in the United States and 1,100+ stores globally. The company is based in Atlanta, Georgia, and was founded in June 1978 by Bernard Marcus, Arthur Blank, Kenneth Gerald Langone, and Pat Farrah.
1. Carvana Co. (NYSE:CVNA)
Number of Hedge Fund Holders: 109
Carvana Co. (NYSE:CVNA) is one of the 14 Best Consumer Discretionary Stocks to Buy Right Now.
On February 20, UBS reduced its target price on Carvana by 11.0% to $485 (from $585) but retained its Buy recommendation. This price update was triggered by Carvana’s Q4 2025 earnings miss, which the analyst attributed to higher (albeit temporary) reconditioning costs and flat gross profit per unit (GPU). Despite the cost challenges, the company’s revenue growth targets remain intact, with Carvana on track to achieve its goal of selling 3 million retail units per year by 2035.
For reference, Carvana released its Q4 2025 earnings on February 18, which showed 42.3% YoY growth in adjusted EBITDA. Earnings growth was driven primarily by volume. The company sold 163,522 retail units in Q4, up 43.0% YoY – outpacing traditional used auto dealers, which grew between -3% and 5% YoY.
Despite the rapid volume-driven earnings growth, EBITDA still missed analysts’ expectations due to higher costs. More specifically, Carvana’s management singled out reconditioning costs as exceeding their expectations. The higher cost translated into a 3.7% YoY decline in GPU (from $6,671 to $6,427) and a 100-basis-point YoY contraction in adjusted EBITDA margins (to 9.1% from 10.1%).
Carvana Co. (NYSE:CVNA) operates an e-commerce platform for buying and selling used cars. The company is based in Tempe, Arizona, and was founded in 2012 by Ernest Garcia III, Benjamin Huston, and Ryan Keeton.
While we acknowledge the potential of CVNA as an investment, 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 CVNA and that has 100x upside potential, check out our report about this cheapest AI stock.
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