The economy faces uncertainty due to decreased consumer spending and a slowing job market. The impact of raising interest rates 11 times from 2022 to 2023 is seen through consumer spending, which saw 0% growth from March to April and a 0.1% decrease when excluding gas and vehicle sales. These statistics don’t account for inflation, meaning real consumer spending has further decreased. Retail analyst Claire Tassin observes signs of a “retail pullback” from consumer surveys. A continued lack of entry-level jobs is expected to raise unemployment rates. If these trends continue, economic output will suffer, making these the prime stocks to sell.
Boeing (BA)
Boeing (NYSE:BA) is an aerospace company that develops and manufactures commercial airplanes, defense products and space systems for over 150 countries. The company has recently come under fire after two whistleblowers were found dead.
Boeing does not show promising financials either. The company missed revenue analyst predictions by 2.42% on its Q1 2024 earnings call, and revenue is down 7.54% YOY. Profitability has taken a significant hit, as seen in a free cash flow reaching -$3.52 billion, and will suffer further.
Executive Vice President and Chief Financial Officer Brian West states that the plane delivery backlog grew to $448 billion and includes over 5600 airplanes on the Q1 earnings call. Morningstar analysts have predicted that at 2023 production rates it will take more than 11 years for Boeing to fulfill all of these orders, hurting the company’s bottom line for the foreseeable future. Additionally, a recent incident wherein a door on an Alaska Airlines flight flew off has caused the FAA to limit Boeing’s its rate of production to 38 a month. With a bad long-term outlook, I would advise Boeing to be in your list of stocks to sell.
Target (TGT)
Target (NYSE:TGT) is a large scale American retail company with over 1,900 locations nationwide. Slowing consumer spending nationwide from inflationary pressures negatively affects all retail stores — but why did I choose Target specifically?
Target does not show promising financials, falling in line with the predictions on future retail spending stated above. Revenue is down 3.12% YOY, and Target has reported misses on analyst earning expectations for both revenue and earnings per share. A 12.96% decline in cash from operations indicates that management is not able to offset revenue losses either.
After initially stating plans to roll out express self-checkout to most of its locations nationwide, Target has switched back to traditional lane service only at some locations. Target has allegedly made this decision to combat shoplifting. Self-checkout kiosks would lower Target’s operational costs, however, these kiosks can lead to increased prevalence of shoplifting, causing some Target locations to be shut down. Changes to traditional lane service can discourage consumers, as checkout takes longer. When combined with inflationary price pressures, this increased wait time could encourage consumers to choose other retailers over Target. Investors should choose Target as one of the stocks to sell for these reasons.
Celsius (CELH)
Celsius (NASDAQ:CELH) is a global beverage company, specializing in energy drinks. The global beverage and energy drink markets demonstrates great indicators of long-term growth. Unfortunately, Celcius will not be included in this.
Celsius showcases amazing financials, with a 36.84% YOY increase in revenue and 27.38% increase in assets. This asset outpaces its 25.01% YOY growth in liabilities, showing good financial health with regards to the company balance sheet. However, the issues with this stock do not stem from its financials.
Despite strong growth potential with an 8.4% CAGR, the energy drink market has been volatile with respect to industry leaders. Originally dominated by Monster Energy (NASDAQ:MNST) and Redbull, the market saw competition from Vital Pharmaceuticals from 2020 to 2022. Bang Energy’s downfall came after false advertising litigation from Monster over “super creatine” healing property claims, leading to bankruptcy and Monster’s acquisition of Vital Pharmaceuticals. Similarly, Celsius now faces a class action lawsuit for misbranding and selling drinks without FDA approval, threatening its reputation. Due to these uncertainties and the lawsuit, I consider Celsius a stock to sell.
On the date of publication, Matthew Rodrigues held no positions in stocks mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.