Last year Americans spent a lot of money upgrading their homes as the pandemic forced them to stay indoors for months. This had helped home improvement and home furnishings businesses thrive. The trend is expected to continue this year. A significant increase in the popularity of online platforms and the availability of instructions, kits and techniques for DIY projects will fuel the global home improvement market.
Tailwind in 2021
The real estate market was a bright spot last year and given the tailwind, growth will continue into 2021. People continue to move from high density metropolitan areas to suburbs while continuing to work and study from home. The conversion or conversion of existing living spaces includes the conversion of unused rooms into home offices and from study tables into classrooms.
Among the factors that support growth, vaccination and employment are paramount. So far, experts believe the United States will have mass vaccination by mid-2021, which will help the economy reopen and resume settings fully. Falling unemployment will provide disposable income and encourage people to spend more.
Second, even after vaccination, many companies will continue to evaluate how much flexibility they want to offer employees who want to work from home. Employees also weigh the benefits of working from home, and why not? By logging in remotely, you can be in cheaper areas. The National Association of Realtors estimates 18% of the US workforce will continue to work from home this year. When it comes to home office space, people are focusing more on lighting and decorating the walls to capture the office-like environment, as well as video conferencing and virtual meetings.
After all, low lending rates have encouraged Americans to keep homes neat or chic. People today prefer to spend time in gardens and outdoors rather than in congested areas. This has spurred a surge in garden transformation projects, and Houzz, an online home design and renovation platform, reported a surge in web searches for DIY fire pits, hot tubs, and outdoor kitchens over the past year. These house upgrades also increase the house value. This home improvement trend is set to continue this year as the demand for outdoor kitchens, covered restaurants, and entertainment areas increases.
The story goes on
What is more? Recently, urbanization, rising disposable incomes in developing countries, and lifestyle changes in developed countries have been driving factors supporting the boom in the home improvement retail market. In fact, multiple parents are now calling it a family activity where the whole family can engage in wall painting, letter boards, shoe racks, planters, garden furniture projects, and more.
According to a Research Dive report, the global home improvement market is expected to have a CAGR of 3.2%, representing revenue of $ 784 billion by 2027, compared to $ 611.7 billion in 2019. The North America region owns a significant market share, with sales of $ 340 billion in 2019, and is expected to reach as much as $ 423 billion by 2027.
5 stocks to see
The need for larger apartments for office and work space as well as the massive expenditure on kitchen and bathroom projects are further driving the housing market this year. This will also help increase the home improvement space. So we’ve shortlisted five stocks for investors to keep an eye on.
Ethan Allen Interiors Inc. ETH works as an interior designer as well as a manufacturer and dealer of furnishings. The company’s expected earnings growth rate for the current year is more than 100% compared to the projected earnings growth of the Zacks Retail – Home Furnishings industry of 55.3%.
The Zacks consensus estimate for the company’s earnings for the current year has been revised upwards by 27.4% over the past 60 days. Ethan Allen beats a Zacks rank 1 (strong buy). You can see The full list of today’s Zacks # 1 Rank stocks can be found here.
Lowe’s Companies, Inc. LOW operates as a hardware store. It offers a range of construction, maintenance, repair, remodeling and decoration products. The company’s expected earnings growth rate for the current year is 52.3% compared to Zacks Building Products – its forecasted retail earnings growth of 11.4%. The Zacks consensus estimate for the current year’s result has risen 2.2% in the past 90 days. Lowe’s has a Zacks rank 2 (Buy).
The Home Depot, Inc. HD operates as a hardware store. It sells various building materials, home improvement products, lawn and garden products, and decoration products. The Zacks Rank # 2 company’s expected earnings growth rate for the current year is 14.8% compared to Zacks Building Products – Retail Store, which has forecast earnings growth of 11.4%. The Zacks consensus estimate for the current year is up 2.8% in the past 90 days.
Wayfair Inc. W is in the e-commerce business, selling furniture, decor, decorative accents, housewares, seasonal decor, and other housewares. The company’s expected earnings growth rate for the current quarter is more than 100% compared to the projected earnings growth of the Zacks Internet – Commerce industry of 10.7%. The Zacks consensus estimate for the current year’s result has risen 5.1% in the past 60 days. Wayfair has a Zacks rank 3 (Hold).
The Sherwin-Williams Company SHW develops, manufactures, distributes and sells paints, coatings and related products to professional, industrial, commercial and retail customers. This company, part of the Zacks Paints and Related Products industry, expects an expected earnings growth rate of 10% for the current year. The Zacks consensus estimate for the current year’s earnings has risen 1.1% in the past 60 days. Sherwin-Williams wears a Zacks rank 3.
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The SherwinWilliams Company (SHW): Free Stock Research Report
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Lowes Companies, Inc. (LOW): Free Stock Analysis Report
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Wayfair Inc. (W): Free Stock Research Report
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