Many companies that cater to consumers will benefit from a trend in rising wages in several developed labor markets around the world, Jefferies points out. Companies like luxury goods retailer Tiffany & Co. (TIF) and e-commerce giant Amazon.com Inc. (AMZN) are poised to reap rewards from tightening labor markets that are forcing companies to increase compensation to attract employees.
Jefferies analyst Sean Darby specifically noted an “embryonic wage cycle is appearing in Japan, U.S., Netherlands and Germany.”
"Our point is that finally companies are recycling their profits back into their economies and that there is a growing likelihood that the breadth of consumer beneficiaries will widen," Darby continued.
Here are six companies with already-soaring stocks that Jefferies believes could get further boost from global wage trends:
1. Amazon.com Inc.
Amazon stock is up more than 100% the past 52 weeks and up 62% so far this year. The dominating online retailer reported $52.9 billion in second-quarter revenue. Its cloud business has been booming with year-over-year growth of nearly 49% to $6.11 billion in revenue. (See also: Amazon to Hit $2.5 Trillion by 2024: MKM.)
As an established traditional retailer, Gap has been struggling to compete with online retailers in recent years. But its more affordable clothing, especially from its Old Navy line, have given it an edge recently against other retailers. Gap recently reported disappointing earnings, but as a worldwide company, Gap is well positioned to benefit from consumers have extra spending money. Gap shares are up 28% the past 52 weeks, but down 12% year to date (YTD).
3. Michael Kors Holdings Limited (KORS)
Another retailer reaching global markets, Michael Kors targets the luxury market. Kors has faced rising competition from retailers like Kate Space and Coach, but its shares are thriving. The stock is up 78.2% the past 52 weeks and up 18% YTD. (See also: 4 Overlooked Blue Chip Winners.)
Kohl’s shares are up 109% the past 52 weeks and up 48.4% year to date. The department store chain reported second-quarter profit surged 40% to $292 million as it worked to pare down its footprint and share physical space with tenants like Aldi or gyms. Revenue was up 4% to $4.57 billion.
Under Armour shares are up 27.9% the past year, and up 50.2% YTD. Internationally, Under Armour revenue increased 28% in the second quarter, driven by strong gains in Europe and Asia. Overall, revenue was up 8% to $1.18 billion. (See also: Under Armour’s Stock May Become a Runaway Winner.)
6. Tiffany & Co.
Tiffany, which is scheduled to report second-quarter earnings Aug. 28, reported first-quarter results that soundly beat Street estimates. The high-end luxury jewelry maker benefits from its established worldwide brand when consumer spending increases. Tiffany shares are up 46.3% so far this year, and up 24.9% YTD. (See also: 5 Retail Stocks to Lean as Economy Picks up Speed.)