What is a cyclical stock? (2024)

What is a cyclical stock?

Cyclical stocks are known for following the cycles of an economy through expansion, peak, recession, and recovery. Most cyclical stocks involve companies that sell consumer discretionary items that consumers buy more during a booming economy but they spend less on them during a recession.

What is an example of a cyclical stock?

Cyclical stocks tend to be for expensive durable goods, luxury, or leisure. Therefore, stocks in the automotive industry, consumer durables, airlines, luxury goods makers, and hospitality stocks would be prime examples.

Is Apple a cyclical stock?

Examples of cyclical stocks include Starbucks, Delta Air Lines, Disney, and Apple.

What are the top 10 cyclical stocks?

Is Amazon considered a cyclical stock?

But investors should look at things in the proper context. Amazon's business is cyclical, which means it is highly sensitive to changes in macroeconomic conditions -- including inflation and rising interest rates, which can hurt consumer confidence.

What are the biggest cyclical stocks?

Is Home Depot a cyclical stock?

Home Depot: Home Depot, a home improvement retailer, is another example of a cyclical stock.

Why is Tesla a cyclical stock?

What is an example of a cyclical stock? Tesla is an effective example of a cyclical stock. It is a manufacturer of luxury electric cars, which people buy when they expect to drive around, but also when they have plenty of money that they feel comfortable spending.

Why is Nike a cyclical stock?

Cyclical stocks' returns follow the economic cycle, which is influenced by macroeconomic changes. A cyclical stock is generally the opposite of a defensive stock. Defensive stocks are commodities like Campbell Soup, whereas cyclical stocks are companies with discretionary products like Starbucks or Nike.

Is a bank a cyclical stock?

Banks are cyclical businesses, meaning they are sensitive to recessions.

How do you identify cyclical stocks?

Cyclical stock companies can be easily spotted in the stock market as they primarily produce goods and services categorised as comfort and luxury goods. While it is not necessary for survival, people having higher disposable income often opt to purchase such goods to increase their standard of living.

Are cyclical stocks risky?

Risk and Volatility: It's important to acknowledge that investing in cyclical stocks comes with a higher level of risk and volatility compared to defensive stocks. During economic downturns, cyclical stocks may experience significant declines in value.

What are the most non cyclical stocks?

Is Disney a cyclical stock?

The Walt Disney Company

Entertainment giant Disney (DIS -0.83%) has some cyclicality to its business. Consumers reduce their spending on discretionary purchases such as vacations during a recession. That affects Disney's parks and other consumer businesses.

Is McDonald's a cyclical stock?

The 83 rating InvestorsObserver gives to McDonald's Corp (MCD) stock puts it near the top of the Consumer Cyclical sector. In addition to scoring higher than 79 percent of stocks in the Consumer Cyclical sector, MCD's 83 overall rating means the stock scores better than 83 of all stocks.

Is Walmart stock Undervalued?

Over the past twelve months the share price is up 13.04%. Based on the DCF valuation, the stock is undervalued. The DCF value of $174.70 per share is higher than the current market price of $163.24. The Margin of Safety is 6.56%.

What are the most undervalued stocks in March 2024?

The top undervalued, non-penny stocks on the NYSE or the Nasdaq for March 2024 that trade below $50 per share include Joyy, Ebang International Holdings, STRATTEC Security, Central Plains Bancshares, EuroDry, Landsea Homes, Viatris, Alico, Universal Stainless & Alloy Products, EQT, and Consolidated Water Co.

What is a good consumer cyclical stock?

Companies whose stocks are cyclical include car manufacturers, airlines, furniture retailers, clothing stores, hotels, and restaurants. When the economy is doing well, people can afford to buy new cars, upgrade their homes, shop, and travel.

How do I buy cyclical stocks?

Before selecting a cyclical stock, it makes sense to pick an industry that is due for a bounce. In that industry, choose companies that look especially attractive. The biggest companies are often the safest. Smaller companies carry more risk, but they can also produce the most impressive returns.

Is Lululemon a cyclical stock?

Analysts Offer Insights on Consumer Cyclical Companies: Conn's (CONN), Lululemon Athletica (LULU) and Boyd Group Services (OtherBYDGF)

Will Tesla bounce back?

Wall Street expects Tesla earnings per share of just $2.96 a share in 2024, according to FactSet. That would be a around a 5% decline vs. last year's $3.12. That was a 23% decline vs. 2022. Analyst project a solid increase in 2025 to $4.13 a share.

Why Tesla stock sinking?

Key Facts. Tesla stock fell by 4.5% to below $170 after Wells Fargo analysts cut their rating on the stock to a sell, dubbing Tesla a “growth company with no growth” and setting a $120 share price target for Tesla, predicting a 30% downslide to what would be the stock's lowest price since Jan. 2023.

What are cyclical stocks greatly influenced by?

Cyclical stocks are a type of equity that is significantly influenced by large-scale or systematic changes in the overall economy. They are strongly correlated with the state of the economy and are subject to price fluctuations that echo the broader economic cycle.

Is Starbucks a cyclical stock?

Cyclical stocks include discretionary companies, such as Starbucks or Nike.

What are income generating stocks?

Income stocks are stocks that offer regular and steady income, usually in the form of dividends, over a period of time with low exposure to risk.