Is Consumer Discretionary a Dead End? These 3 Stocks Say No

Written by Nathan ReiffConventional investor wisdom holds that the consumer discretionary sector performs best when the economy is thriving and customers have money to spend. Low interest rates and strong job growth may be other important indicators of a potential boom in consumer discretionary companies.

With those things in mind, investors might expect that stocks in the consumer discretionary sector would be a non-starter in mid-2025. After all, a recent employment situation report from the U.S. Bureau of Labor Statistics showed only 139,000 jobs added in May 2025, down significantly from 272,000 added in May 2024.

Interest rates have been persistently high, and consumer confidence remains mixed at best. The Consumer Discretionary Select Sector SPDR Fund (NYSEARCA: XLY), an exchange-traded fund (ETF) representing a wide swath of the sector, is down more than 2% year-to-date (YTD), even while the broader S&P 500 is up 3%.

Dependable, Steady Performance Alongside Strong Dividend and Protection From Tariffs

Greif Inc. (NYSE: GEF) manufactures industrial packaging, corrugated sheets, paperboard, and similar products. Though it is a consumer discretionary company, Greif’s versatile product line allows it to benefit from client activity across a host of industries and many sectors.

The company is also extraordinarily well-established, having been in business for nearly 140 years, and this stability makes it possible for Greif to pay a dividend with a healthy dividend yield of 3.36% and a strong payout ratio of 60.85%.

What may attract investors to Greif most at this point, however, is the company’s recent performance. Despite huge challenges across the market, Greif is proof that dependability can still generate strong—if not exceptional—results. The company’s earnings per share of $1.19 beat analyst predictions by 11 cents, while quarterly revenue rose just over 1% year-over-year (YOY) as well. This was about the same as the YOY growth in net sales.

Although neither top nor bottom-line gains were significant, they reflect success in Greif’s efforts to optimize costs. The company expects to achieve $25 million in savings this fiscal year and $100 million by the end of fiscal 2027.

Greif is also insulated from the negative impact of tariffs thanks to its locally-focused operational structure. Though it has a footprint in dozens of countries, Greif’s products are mostly sold close to where they are manufactured, saving it from high tariff costs as goods cross borders.

Successful Strategic Initiative Leads to Strong Results and Optimistic Guidance

Like Greif above, O-I Glass Inc. (NYSE: OI) has a history of more than 100 years as a packaging manufacturer. In the case of O-I, however, its products include glass containers for the food and beverage industry. With customers increasingly concerned about the use of plastics in food service, glass may be poised for increasing demand, benefiting O-I.

Announced last year, O-I’s ambitious Fit to Win program, seeking to make operations more efficient and improve profitability by decentralizing, streamlining supply chains, engaging in stringent capital management, and more, has been a success. Adjusted EPS of 40 cents per share for the first quarter of 2025 topped analyst predictions by a full 22 cents, and O-I announced $61 million in benefits related to the Fit to Win program alone.

The company is optimistic about future quarters, projecting adjusted earnings for 2025 to surge as much as 85% above 2024 levels. Analysts generally share this sentiment, as the company has six Buy ratings against two Holds and an expected upside potential of more than 16%.

Executive Turnover Not Enough to Quell Analyst Bullishness

Like the two companies above, Silgan Holdings Inc. (NYSE: SLGN) is also involved in a niche corner of the packaging industry. Silgan makes metal and plastic closures, metal containers, and similar products for many different applications.

Silgan is also coming off a fairly strong earnings report earlier in the year. Although top-line performance didn’t quite meet expectations (despite over 11% YOY improvement in revenue), EPS of 82 cents per share came in 4 cents over predictions.

Despite its advantageous position in the packaging industry, Silgan may be a somewhat less certain bet than the firms above. The president of the company’s U.S. metal containers business, Silgan Containers, resigned in early June, introducing an element of uncertainty into a key portion of the larger company’s operations.

Still, there is strong optimism among analysts, with all nine ratings for SLGN shares a Buy as of mid-2025.

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Why a Trump-Musk Feud Could Mean Big Wins for AST SpaceMobile

Written by Nathan Reiff

In mid-June 2025, space-based cellular broadband provider AST SpaceMobile Inc. (NASDAQ: ASTS) reached its highest share price in nearly 10 months, with analysts viewing the stock optimistically and calling for nearly 19% further upside potential.

But a five-day return of more than 38% could scare many investors off unless there’s reason to believe it could be part of a longer-term rally.

The major boost to ASTS stock coincided with a highly publicized dispute between President Trump and Elon Musk. Though this feud is not the sole reason ASTS shares have skyrocketed in recent weeks, it is likely the primary driver of this performance.

Ultimately, much of the rally aligning with the Trump-Musk back-and-forth probably stems from speculation. Nonetheless, it reveals some critical considerations investors should make about AST SpaceMobile and the rapidly evolving landscape of space companies.

Feud Casts Doubt on Starlink

AST SpaceMobile has experienced striking growth in recent months, surging by nearly 262% in the last year. However, a lingering thorn in its side is Starlink, the satellite internet service provider subsidiary of Musk’s aerospace company SpaceX.

Starlink’s threats to AST became more significant after last November’s election and Musk’s close relationship with Trump. Indeed, reports indicated that Starlink began to expand its reach across federal government agencies early into the new Trump administration.

Investors in AST and other publicly traded competitors may have worried that Musk’s partnership with Trump could result in a monopoly for Starlink. With an estimated two-thirds of internet satellites in orbit being represented by Starlink after the election, this risk appeared likely only to grow.

An issue for other satellite-based providers is that there is finite orbital capacity, meaning that once a certain number of satellites are in place at particular orbits, it is difficult or impossible for others to be added. Starlink’s early advantage still has the potential to crowd out other companies from getting infrastructure in place, despite AST’s moves to rapidly launch a growing number of its own satellites.

However, the recent rift between Musk and Trump may have threatened Starlink’s advantage. Trump responded to Musk’s criticism of the former’s signature proposed spending bill by floating the idea of canceling federal contracts held by Musk’s companies, presumably including SpaceX.

Musk also signaled his willingness to pull back from prior partnerships by suggesting that SpaceX would discontinue the Dragon spacecraft previously used for International Space Station missions, although he later retracted that statement.

Potential Impact for AST SpaceMobile

While investor response to the public dispute arising between Musk and Trump is speculative, the boost has so far been priced into ASTS shares. This adds to a series of positive developments for AST SpaceMobile, making it an increasingly attractive prospect for many buyers.

The firm has made significant progress in building out its infrastructure, both in terms of satellite launches over recent months and in a series of lucrative, high-profile partnerships with existing telecommunications providers. The company has also recently secured important agreements with multiple government agencies, independently of any developments related to Musk and Starlink.

A coordination agreement with the U.S. National Science Foundation and a $43-million new contract award in support of the United States Space Development Agency are prime examples.

Another key development for AST is its shift toward commercialization. In its first-quarter earnings, the company said it expects to activate initial cellular broadband capabilities across multiple continents in the coming quarters thanks to partnerships with telecommunications companies in the United States, Europe, and Japan.

This is forecast to lead to revenue opportunities of between $50 million and $75 million in the second half of 2025.

AST Remains Attractive, Despite Starlink Uncertainty

Investors will likely have a hard time predicting whether a blossoming feud between Trump and Musk continues to develop or fade away, and it will be even harder to decipher the potential impacts for Starlink and its competitors.

However, AST is an attractive prospect on its own, regardless of these external factors, and is worth investor attention as it continues to expand its reach into a massive addressable market.

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Nintendo Stock Near Highs—Will the Switch 2 Keep the Rally Alive?

Written by Chris Markoch

Parents beware. Christmas came early in 2025 as Nintendo Co., Ltd. (OTCMKTS: NTDOY) released its hotly anticipated Switch 2 handheld gaming console. It comes with a hefty price tag of $449.00.

However, investors who bought NTDOY stock earlier this year may easily have enough profits to cover the premium price. The stock is up 43% in 2025 and is trading near its all-time high.

A run-up like that leads to concerns that there’s not much upside left. Events like the Switch 2 launch can be a “sell the news” event. NTDOY stock is up just 1.3% in a volatile week of trading since the Switch 2 launch.

However, analysts give NTDOY stock a consensus price target of $25.60, which would be a 22% upside from the stock’s closing price on June 10. What do investors need to know about the opportunity in Nintendo stock?

Nintendo Is Affirming Its Premium Position

By many accounts, Nintendo saved the video game industry in the mid-1980s. At that time, the company established itself as offering premium value, and it’s never deviated from that.

Nintendo is well-known for prioritizing software development. The company has a long-standing policy of limiting the number of games its developers can make, so the focus is on quality rather than quantity. From 2019 through 2023, about 80% of the company’s software revenue came from its first-party games.

In fact, it’s never had a gaming console priced higher than $300. Even at $450, the Switch 2 is priced less than the Sony PlayStation of 20 years ago. Consumers have had to wait for the Switch update for eight years, so they may accept that price hike.

However, the price of video games made for the Switch is also increasing. Mario Kart, the signature game for the device, will be $80. That’s significantly higher than the previous $60 price point from the prior version. Some analysts believe that tariffs played a role.

Nintendo is denying the claims, and there’s some evidence that on an inflation-adjusted basis, the new pricing is still very favorable. However, the launch is coming at a time when many consumers are stretched and stressed.

An Outlier in a Weak Sector

Consumer discretionary stocks continue to be hit or miss for investors. The Consumer Discretionary Select Sector SPDR Fund (NYSEARCA: XLY) is down about 3% in 2025. Some of the top holdings in the fund including Tesla Inc. (NASDAQ: TSLA), Lululemon Athletica Inc. (NASDAQ: LULU), and more recently McDonald’s Corp. (NYSE: MCD)have been among the market laggards.

This was supposed to be a great year for these stocks. The expectation was that inflation and interest rates would come down, and consumers would take care of the rest.

But during the first half of 2025, that forecast hasn’t materialized yet. The rate of inflation has decreased, but not enough to prompt the Federal Reserve to take action. Additionally, the potential impact of tariffs is holding consumer sentiment back.

Fundamentals Are Bearish, But Technicals Suggest Bullish Momentum

A price-to-earnings (P/E) ratio of around 46x puts Nintendo above its historical averages. The same is true of the stock’s price-to-sales (P/S) ratio and its price-to-book (P/B) ratio.

Nevertheless, its most recent earnings report in May didn’t include any of the benefits from the Switch 2 launch. It’s fair to say that some of that is priced into the stock already.

The bottom line is that if the company doesn’t meet its goals for the Switch 2 launch, there could be significant value compression. But in the near term, the NTDOY stock chart looks slightly bullish.

After moving to an all-time high, the stock is finding resistance, which is just shy of $21. However, the moving average convergence divergence (MACD) has been swinging from bullish to bearish and appears to be ready to swing bullish again.

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