Consumer Sentiment Hits 6-Month High: 4 Discretionary Stocks to Buy

Americans appear confident about the economy despite several challenges. Consumer sentiment improved to a six-month high amid concerns about a shrinking labor market and high prices. The jump in sentiment comes as consumers remain optimistic that inflation will ease in the coming months.

Given this scenario, we recommend buying four consumer discretionary stocks, namely, Carnival Corporation & plc CCL, Dolby Laboratories, Inc. DLB, Marriott International, Inc. MAR and Ralph Lauren Corporation RL.

These stocks have seen positive earnings estimate revisions in the past 60 days, carry a Zacks Rank #1 (Strong Buy) or 2 (Buy), and are set for solid returns. You can see the complete list of today’s Zacks #1 Rank stocks here.

Consumer Sentiment Recovers

The University of Michigan said its Consumer Sentiment Index rose to 57.3 in February from the final reading of 56.4 in January. This is the highest level since August 2025 and sharply above the consensus estimate of a decline to 55.

High prices and a tightening labor market have raised concerns among people. Job openings dropped to a five-year low in December, according to the latest government data. However, investors are confident that inflation will ease in the near term and the situation will improve.

The short-term inflation expectation over the next year declined to a 13-month low of 3.5% in February from 4% in the previous month. However, the long-term inflation expectation over the next five years jumped to 3.4% from 3.3% in January.

Investors believe that the worst of the burden of President Donald Trump’s tariffs is over and the situation will improve. Also, inflation eased in November, and investors are hopeful that the Federal Reserve will go for multiple rate cuts this year, too, despite projecting a single 25-basis-point rate cut earlier.

4 Consumer Discretionary Stocks With Upside

Carnival Corporation & plc

Carnival Corporation & plc operates as a cruise and vacation company. As a single economic entity, CCL forms the largest cruise operator in the world. Carnival Corporation & plcis the world’s leading leisure travel firm and carries nearly half of the global cruise guests.

Carnival Corporation’s expected earnings growth rate for the current year is 12.9%. The Zacks Consensus Estimate for current-year earnings improved 5.8% over the last 60 days. CCL currently sports a Zacks Rank #1. 

Dolby Laboratories, Inc.

Dolby Laboratories, Inc. develops audio and imaging technologies that revolutionize entertainment for user-generated content, TV shows, films, music and gaming. A majority of DLB’s revenues are derived from the licensing of audio technologies. Dolby Laboratories operates on various licensing models, including a two-tier model, an integrated licensing model, a patent licensing model, recoveries and collaboration arrangements.

Dolby Laboratories’expected earnings growth rate for the current year is 0.9%. The Zacks Consensus Estimate for current-year earnings has improved 1.9% over the past 60 days. DLB currently carries a Zacks Rank #2.

Marriott International

Marriott International is a leading worldwide hospitality company focused on lodging management and franchising after the spin-off of its timeshare business into a publicly traded company in November 2011.

At the end of the fourth quarter of 2025, Marriott's development pipeline totaled 4,056 hotels with approximately 610,000 rooms.MAR currently has a Zacks Rank #2.

Ralph Lauren Corporation

Ralph Lauren Corporation is a major designer, marketer and distributor of premium lifestyle products in North America, Europe, Asia and internationally. RL offers products in apparel, footwear, accessories, home furnishings, and other licensed product categories.

Ralph Lauren’s expected earnings growth rate for next year is 30.5%. The Zacks Consensus Estimate for the current-year earnings has improved 5.2% over the past 60 days. Currently, RL has a Zacks Rank #2.

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This article originally published on Zacks Investment Research (zacks.com).

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