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Black Friday is almost here.
Normally, shoppers would be preparing to roll out either Thursday evening or early Friday morning for door-busting retail bargains. But this year is different. And that changes things for the best Black Friday stocks to buy.
Black Friday has traditionally been the start of the home stretch of holiday shopping, with tens of billions of dollars spent in a single day.
It is going to be a very different Back Friday this year. There will be fewer stores opening on Thanksgiving evening. In many areas, state and local governments are discouraging shoppers from heading out to shop because of the recent coronavirus spike. For those that do go, face masks will be required in pretty much every store.
Spending in brick-and-mortar stores will be down sharply.
Instead, this is going to be e-commerce-driven Black Friday.
It is not just the coronavirus that is going to lower their sales. A recent survey by Goldman Sachs found that 53% of Americans plan to spend less this year. From that, 20% plan to spend a lot less.
A slower Christmas season will probably be kicked off by a much slower brick-and-mortar Black Friday.
The financial media might breathlessly report total Black Friday sales as if it was the most important number in finance history. The brick-and-mortar stores will have terrible numbers, and their stocks could take a hit when the numbers come out next week.
In reality, a large proportion of the money to be spent this Black Friday is going to be spent online.
That should be good news for e-commerce companies' stock prices.
The King of Black Friday Stocks
Leading the way again this year will be Amazon.com Inc. (NASDAQ: AMZN). Amazon should see strong sales from Black Friday all the way through Cyber Monday. The e-commerce giant already has Black Friday deals on its site in everything from electronics to appliances, furniture, and just about anything else you might want to buy this weekend.
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Amazon has pulled back a little over 10% from its highs. But the stream of positive reports over the weekend and early into next week could very well reverse the short-term trend back to the upside.
Several analysts have raised their price target recently to $4,000 a share. Strong Black Friday results could be the launching pad for the stock to quickly climb to that level.
An E-Commerce Stock Ready to Roll
Walmart Inc. (NYSE: WMT) is not usually mentioned as an e-commerce stock, but it has seen online sales explode this year. In the most recent quarter, e-commerce revenue was up more than 70% year over year.
The retail giant is closing locations worldwide to reduce their brick-and-mortar locations and move operations online. Walmart is the only retailer large enough to compete head to head with Amazon. And it has made it clear it intends to do just that.
Walmart also has deals already on its website for just about everything in the store.
Walmart should get a bit of a kick from in-store traffic as well. With consumers watching their cash, the nation's largest discount retailer could be the destination of choice.
Special Delivery from This Black Friday Stock
All the stuff holiday shoppers order online has to get from the warehouse to the front door. That should be more good news for United Parcel Service Inc. (NYSE: UPS). UPS has already seen the rise in e-commerce increase shipping volumes, profits, and the price of its stock.
Analysts have been raising their estimates for UPS earnings since they had a blowout report last month. We would see another round of increases based on high Back Friday online sales.
Black Friday should help keep the part going for UPS shares. Record online sales will translate to record shipping volumes for UPS. Traders will bid the stock higher in anticipation of another great quarter.
The Plastic Black Friday Stock
The other big winner of the online Black Friday we see unfolding this weekend is Visa Inc. (NYSE: V). While it gets paid the same no matter where the sale is made, there are no cash purchases online. If you are avoiding the coronavirus and save a few bucks, you will have to pay with a card.
As the largest digital payments company in the United States, Visa will benefit from the e-commerce takeover of Black Friday.
Any more positive vaccine news this week should also help Visa shares continue to drive higher. While strong e-commerce transactions have helped drive growth for Visa, travel-related volumes have declined. The vaccine will help restore that value and lift the stock even higher.
Three Stocks Even Better Than Visa
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