/Courtesy of Toss Securities
/Courtesy of Toss Securities

Toss Securities noted in a report on the 18th that attention should be paid to the U.S. consumer goods sector in the next 1 to 3 years. While big tech stocks have surged, the consumer goods sector has not received the same attention; however, demand for investment may increase as substitutes in the future.

Lee Ji-sun, a researcher at Toss Securities, also identified the domestic activation policies of the Donald Trump administration and demands for interest rate cuts as factors that are expected to lead to increased consumption, and also noted that the purchasing power of the millennial and Z generations could create new investment opportunities, which is another reason to focus on the consumer goods sector.

The researcher specifically recommended consumer goods stocks that are improving in sales, operating profit margins, and net income. He said, "This is because stock prices can be reassessed when expectations arise for profit growth that surpasses previous growth or transitions to profitability."

The researcher presented Gap (GAP) as a recommended consumer goods stock. Gap operates the American clothing brands Gap, Old Navy, Banana Republic, and Athleta. The average target price for Gap is $28, which indicates approximately 40% upside potential compared to the current stock price.

The researcher stated, "The rebranding strategy launched by Gap's new management is hitting its mark, showing stable recovery in performance," and added, "With improving cash flow and rapidly decreasing net debt, Gap is actively pursuing shareholder-friendly policies like share buybacks and dividends."

The researcher also recommended Carnival Corporation (CCL) and DraftKings (DKNG). Carnival is the market leader in the cruise industry, while DraftKings operates online sports betting services and casinos. The target prices for Carnival and DraftKings represent upside potential of over 40% and 50%, respectively, compared to their current stock prices.