After a downbeat start to the year, consumer discretionary stocks have rallied this quarter and are outperforming the broader market. The S & P 500 consumer discretionary sector is up 16% in the third quarter, beating the S & P 500 in that time and only lagging energy. That gain puts the sector on track for its biggest quarterly gain since the second quarter of 2020, when it surged 32.6%. The sector, however, is still down more than 22%, as spending takes a hit and investors shy away from growth areas in a rising rate environment that shows few signs that it’s subsiding. Despite this, there are some stocks in the sector that have better weathered the storm over the last few months and could gain more going forward. To find the sector’s potential near-term winners, CNBC Pro used FactSet to screen the sector for names that are up at least 1% this quarter. We also looked for names that are loved by analysts, with more than 50% of saying to buy them and could see a potential upside of 15% going forward based on their consensus price target. Here are some of the names that came up: A slew of travel and gaming stocks made the cut, including MGM Resorts , Booking Holdings , Penn Entertainment and Caesars Entertainment . Shares of Caesars have plummeted about 53% this year and more than 63% off their 52-week high but could rally nearly 66% based on the average price target. Like travel and gaming stocks, big technology names have also felt the pinch this year as investors move out of growth areas in the face of further rate hikes. Amid this backdrop, shares of Amazon have slumped nearly 22% this year, but have rebounded about 23% this quarter. The consensus price target also suggests that shares could rally another 29.2% going forward. Home improvement stocks Home Depot and Lowe’s also made the list, with shares of both companies up 8.9% and 16.2%, respectively, this quarter. In their recent earnings reports, both Home Depot and Lowe’s indicated that demand continues to remain strong despite a slowing housing market . Aside from technology, home improvement and travel stocks, a slew of retail names also made the cut. Bath & Body Works shares have risen the most among the names that made the screen, with shares up nearly 41% this quarter as of 1:30 p.m. on Thursday. A recent CNBC Pro screen found the stock among a slew of names positioned to benefit when the Federal Reserve stops hiking rates and the market continues to rally. Target , Ulta Beauty , Tapestry and General Motors also made the list.
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