The outlook for consumers in 2025 appears promising, at least according to Goldman Sachs. Their analysts have pinpointed several stocks that might see upward movement as a consequence. In a recent client note, they shared that while the growth of disposable personal income continues, it’s at a slower pace than before. However, with interest rates seemingly set to ease, they foresee a strong consumer climate. The firm predicts a decline in essential spending growth to 2.3% this year from 3.6% in 2024. This trend is largely attributed to falling energy costs, slower growth in healthcare expenses, and food inflation lingering in the low single digits. “Ultimately, we expect this to lead to a boost in discretionary cash inflow for US consumers, reaching 4.9% in 2025, compared to 4.2% in 2024, thereby supporting robust discretionary spending alongside increased savings,” the analysts explained.
With this backdrop, Goldman Sachs has identified a few key stocks they believe are well-positioned for next year. For instance, Wingstop has been under scrutiny from investors regarding its potential for positive same-store sales growth this year. Despite these concerns, there might be gains on the horizon for this restaurant chain. The analysts mentioned, “We see a significant opportunity for brand awareness, particularly as Wingstop increases its advertising budget and forms a new multi-year partnership with the NBA, complementing their advertising during NFL games.” Moreover, Wingstop is leading its peers digitally, with over 45 million unique customer profiles, digital sales comprising around 70% of total sales, and a proprietary platform, MyWingstop, offering personalized digital experiences.
Goldman’s optimistic view on Wingstop aligns with most Wall Street analysts, with 15 out of 25 recommending a strong buy or buy. The average price target stands at nearly $371, which indicates a potential 35% upside. Although Wingstop’s stock rose almost 11% in 2024, it has recently faced declines of over 16% in the past month, and more than 30% in the past three months.
Another company Goldman is keeping an eye on is Dick’s Sporting Goods, which outperformed the overall market last year, climbing over 55%. The firm sees even more growth potential for Dick’s. They noted the opportunity for future expansion is tied to increasing operating income through its GameChanger app, which offers features like scorekeeping and live video streaming for teams and fans in the U.S. “As Dick’s rolls out the Game Changer platform and shifts digital ad spending from search to retail, there is a chance for further growth through a retail media network,” they said. However, opinions on Dick’s are divided. Of the 29 analysts covering it, 14 have issued a strong buy or buy rating, while another 14 suggest a hold. Price targets indicate a conservative 4% upside.
Chipotle, after gaining nearly 32% in 2024, has seen a double-digit retreat from its highs. Goldman suggests this drop presents a “compelling” investment opportunity. They posit that if the return-to-office trend accelerates, Chipotle might benefit greatly, alongside Sweetgreen. “We believe CEO Scott Boatwright’s experience, formerly COO, and CFO Adam Rymer’s past at Chipotle will help continue building upon the improvements initiated by former CEO Brian Niccol,” noted the analysts. They expect progress in process enhancements and technology investments.
Wall Street remains largely positive about Chipotle, with 26 out of 36 analysts granting it a strong buy or buy rating. Its average target price suggests more than 19% potential upside.
