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The Child Tax Credit will boost spending at Walmart, Amazon, Wingstop and other consumer brands

Cowen analysts call the Child Tax Credit an 'underappreciated stimulus' that sparks all sorts of discretionary spending.

7/15/2021 9:54:00 AM

Walmart, Target, Amazon, Wingstop and Nike will benefit when consumers start receiving Child Tax Credit funds this Thursday. A research group calls the program an “underappreciated stimulus” that will boost spending across a variety of sectors.

Cowen analysts call the Child Tax Credit an 'underappreciated stimulus' that sparks all sorts of discretionary spending.

The Child Tax Credit, which will be paid in monthly installments of up to $300 for children under age 6 and up to $250 for children between 6 and 17 through the end of the year, will benefit about 39 million Americans.Cowen’s Washington Research Group calls the program an “underappreciated stimulus” that will boost spending across a variety of sectors and consumer companies.

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Read: Monthly payments of up to $300 per child are starting for most families — and could keep coming for yearsThe launch of the program coincides with the start of back-to-school shopping and the end of other COVID-related programs.“The timing of this stimulus is particularly helpful as enhanced unemployment benefits begin to roll off in some (mostly red) states and at the federal level in September,” Cowen wrote.

Walmart Inc. WMT, +0.69% and Target Corp. TGT, +0.75% stand to benefit due to their grocery offerings, as well as the diverse merchandise categories that they sell in. Walmart’s price gaps should give the company a leg up as customers become more price sensitive about their grocery budgets. headtopics.com

“[W]e expect Walmart will also benefit from the child tax credits across other departments including apparel and hardlines. Walmart is one of the top back-to-school destinations in the U.S., and we expect child tax credits will only fuel its business in the coming months,” analysts said.

“Target’s grocery business outperformed during the pandemic as the retailer’s category portfolio positioned it to be a one-stop shop as customers consolidated trips.”And: A ‘robust’ U.S. economy is strengthening, Fed’s Beige Book finds, but it’s also grappling with big shortages and higher inflation

The Child Tax Credit is designed to help families that struggle to meet their needs. A Cowen poll found an acceleration in the use of food stamps in 2020, up 11.4% year-over-year to 19.1% penetration.“The pandemic and high unemployment gave rise to heightened food insecurity among the U.S. population, and was likely a driving force behind the increased usage in 2020,” the report said.

The shift to online shopping means Amazon.com Inc. AMZN, +0.12% made gains, with many of those eligible for the Child Tax Credit heading to the e-commerce giant for items like toys, clothing, food and sporting goods.“Most notably, they were highly engaged with Amazon, as they over indexed in terms of Prime membership, visit rates, and purchase frequency, among other key metrics,” the report said. headtopics.com

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EBay Inc. EBAY, -1.03% should also get a bump from the program.Analysts estimate that the Child Tax Credit will benefit the entire restaurant industry. But for the income demographic impacted directly by the program — single consumers with household incomes of less than $75,000 and married consumers household incomes of less than $150,000 — Wingstop Inc. WING, -3.00%, Papa John’s International Inc. PZZA, +0.02% and Jack in the Box Inc. JACK, -1.89% are among the chains that stand to gain the most.

Also: All the ways the Child Tax Credit is NOT the same as a stimulus check. No. 1: You may have to repay itAnd with back-to-school shopping and the holiday season still to come, off-price retailers like Burlington Stores Inc. BURL, +0.35% and athletic names like Nike Inc. NKE, -0.03% and Dick’s Sporting Goods Inc. DKS, +1.23% are favored by Cowen analysts.

“Along with a return to in-school learning and team sports, we believe the setup for this back-to-school season is the strongest we can recall over the last several years,” according to the report.“With inventory levels at historically low levels heading into back-to-school, this should favor vendor gross margin as businesses largely planned conservatively.”

The Consumer Discretionary Select Sector SPDR Fund XLY, -0.18% has gained 13.1% for the year to date. The SPDR S&P Retail ETF XRT, -1.26% is up 48.7%. And the benchmark S&P 500 index SPX, +0.12% has rallied 16.7% for the period. Read more: MarketWatch »

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It’s sad that the only thing propping up our phony economy anymore, is stimulus(tax breaks are just stimulus in disguise). All tax revenue is absorbed to pay the interest on the federal debt, before one nickel is spent on any of the services that taxpayers expect from the gov’t. More like Etsy, and privately owned business

Wingstop an Nike? Really guys..? thanks

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U.S. Treasury pays out $15 bln in Child Tax Credit installmentThe U.S. Treasury said on Wednesday that about $15 billion was paid to families in the first monthly installment of the Child Tax Credit that was expanded under President Joe Biden's $1.9 trillion COVID-19 legislation known as the American Rescue Plan.

Child tax credit payments could act as stimulus for retailers as soon as this monthThe enhanced child tax credits, which begin Thursday, will be the latest government-funded cash infusion. If you want to invest in bitcoin, now would be the best time because we are creating portfolios for investments‼️✅ Send us a text message now and we can create one for you. Minimum investment is $300 Available payment method is bitcoin Fascism at it's finest. Big companies to benefit. Imagine that

Monthly child tax credit payments begin soon: Everything you need to knowThe IRS will pay half the total credit amount in monthly payments, starting July 15. CHILDSUPPORTREFORM because parents that pay need a tax credit

The First Child Tax Credit Payments Go Out To 65 Million Kids This WeekThe First Child Tax Credit Payments Go Out To 65 Million Kids This Week “65 million kids are expected to receive extended child tax credits from the government this week. Here’s information on who qualifies and how families can claim their credits.”

Covid scams cost Americans nearly $500 million — and criminals are now eyeing the child tax creditVictims have lost a combined $488 million, mostly from fraud involving online shopping and travel. The child tax credit poses a new opportunity for scammers.