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Jim Cramer Likes These 7 Discretionary Consumer Stocks for 2023

CNBC’s Jim Cramer offered investors a list of seven stocks on Friday that he thinks would be great additions to investors’ portfolios.

The consumer discretionary sector is down about 37% for the year. Companies in this sector tend to suffer during economic downturns as consumers prioritize paying for essentials like rent or food over discretionary shopping when their budget is tight.

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But “while most discretionary consumer stocks have been terrible this year, we also had reserves of strength and many of them could run into 2023,” Kramer said.

Here is his choice:

original spare parts, O’Reilly Automotive and Autozone

  • Cramer highlighted the three auto parts stocks as potential purchases, saying AutoZone is his favorite. In his view, as used car prices are declining and new car prices are likely to follow, consumers are more likely to fix up their old cars next year than buy new ones.

Ulta Beauty

  • While the company reported stable revenue growth and improved his outlook earlier this month, investors shouldn’t be greedy with the stock, especially if they see big gains, Cramer advised.

TJX companies

  • Parent company TJ Maxx, Marshalls and HomeGoods will benefit from excess inventory left over from the holidays, he said. He added that because TJX operates discount retailers, its shares benefit in times of recession when consumers tend to bargain lower.

Yum! Brands

  • Kramer called KFC’s parent company Taco Bell and Pizza Hut a great deal for consumers.

Starbucks

  • He said he expects a strong return for Starbucks in China once the company’s economy fully reopens.

Disclaimer: Cramer’s Charitable Trust holds shares in TJX and Starbucks.

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