Hanes(US:HBI) ZACKS·2024-12-11 08:16Core Viewpoint - Consumer sentiment in the U.S. has significantly improved, reaching its highest level in seven months, which is expected to positively impact discretionary stocks in 2025 [2][5][6]. Consumer Sentiment and Economic Outlook - The University of Michigan's Consumer Sentiment index increased to 74 in December from 71.8 in November, surpassing the consensus estimate of 73 [5]. - The Current Economic Conditions Index rose to 77.7 in December from 63.9 in November, indicating a positive shift in consumer confidence [5]. - Factors contributing to this rise include easing inflation and the optimism surrounding the upcoming Trump administration, which is expected to implement tax cuts and reduce regulations [3][7]. Discretionary Stocks with Growth Potential - The following discretionary stocks are highlighted for their potential upside in 2025 due to the positive consumer sentiment: - The Walt Disney Company (DIS): Expected earnings growth rate of 13.1% for next year, with revenues of $91.4 billion in fiscal 2024 and a Zacks Rank of 2 [10][11]. - Choice Hotels International, Inc. (CHH): Expected earnings growth rate of 4.7% for next year, with a Zacks Rank of 2 [12]. - Snap-on Inc. (SNA): Expected earnings growth rate of 3.6% for next year, with a Zacks Rank of 2 [13][14]. - Hanesbrands Inc. (HBI): Expected earnings growth rate of 33.3% for next year, with a Zacks Rank of 2 [15]. - Mattel, Inc. (MAT): Expected earnings growth rate of 8.9% for next year, with a Zacks Rank of 2 [16][17]. Market Conditions and Federal Reserve Actions - The Federal Reserve has initiated a rate cut cycle, reducing interest rates by 75 basis points since September, which is expected to support market growth [8]. - Personal income and consumer spending are on the rise, indicating increased purchasing power among consumers [9].