Oppenheimer analyst names his favorite game in space

Retail is in the spotlight this week.

In Tuesday morning earnings reports, Walmart and Home Depot topped estimates. Major players such as Target, Kohl’s, Macy’s and Foot Locker will publish their results in the coming days. July retail sales also came out on Tuesday. All of this data should reveal whether pent-up consumer demand was enough to eclipse the spread of the delta variant.

But as the calendar is teeming with income, Oppenheimer’s chief technical analysis officer Ari Wald has instead turned to a name that isn’t reporting this week as his favorite game in space.

“One of the biggest for us is the auto retail sub-industry,” Wald told CNBC’s “Trading Nation” on Monday. “We recently added AutoZone… to our OpCo Trifecta list. These are stocks that… have both technical, fundamental and portfolio tailwinds.”

“For AutoZone, on a relative basis, the stock was a noticeable underperformance compared to 2019. We believe it hit a low in the first quarter of this year, and the strength we’ve seen since the first quarter, in our opinion, reverses the downward trend that had been in play. I think you see the steeper 200-day curling slope as an argument for this reversal, ”said Wald.

AutoZone is up almost 40% this year. Its next results report is at the end of September.

Michael Binger, president of Gradient Investments, turned to the home improvement industry instead, highlighting Home Depot and Lowe’s as two favorites.

“We think housing starts and home sales, although they have slowed down a bit, are still very strong. All these millennials buying homes right now, we think it’s been a century-old tailwind for quite some time. Home Depot and Lowe’s are top notch. beneficiaries of what’s going on there, ”Binger said in the same interview.

The Home Depot reported better-than-expected profits on Tuesday, but same-store sales were slightly lower than estimated as fewer people visited its stores to purchase items for DIY projects. Lowe’s earnings are set for Wednesday morning.

“We love these stocks, we own them and we would buy them right here before they make money,” Binger said.

Disclosure: Gradient Investments owns HD, LOW.

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