Most consumer discretionary businesses succeed or fail based on the broader economy. This sensitive demand profile can cause discretionary stocks to plummet when macro uncertainty enters the fray, and over the past six months, the industry has shed 4.6%. This performance was disappointing since the S&P 500 climbed 4.5%.

A cautious approach is imperative when dabbling in these companies as many also lack recurring revenue characteristics and ride short-term fads. Keeping that in mind, here are three consumer stocks we’re steering clear of.

Hilton (HLT)

Market Cap: $65 billion

Founded in 1919, Hilton Worldwide (NYSE: HLT) is a global hospitality company with a portfolio of hotel brands.

Why Do We Think Twice About HLT?

1. Annual sales growth of 9.9% over the last two years lagged behind its consumer discretionary peers as its large revenue base made it difficult to generate incremental demand
2. Softer revenue per room over the past two years suggests it might have to invest in new amenities such as restaurants and bars to attract customers
3. Estimated sales growth of 6.8% for the next 12 months implies demand will slow from its two-year trend

At $273 per share, Hilton trades at 33.5x forward P/E. To fully understand why you should be careful with HLT, check out our full research report (it’s free).

News Corp (NWSA)

Market Cap: $17.75 billion

Established in 2013 after a restructuring, News Corp (NASDAQ: NWSA) is a multinational conglomerate known for its news publishing, broadcasting, digital media, and book publishing.

Why Are We Out on NWSA?

1. Products and services aren't resonating with the market as its revenue declined by 2.5% annually over the last five years
2. Projected sales growth of 2.5% for the next 12 months suggests sluggish demand
3. ROIC of 6.3% reflects management’s challenges in identifying attractive investment opportunities

News Corp is trading at $29.88 per share, or 33.4x forward P/E. If you’re considering NWSA for your portfolio, see our FREE research report to learn more.

JLL (JLL)

Market Cap: $11.89 billion

Founded in 1999 through the merger of Jones Lang Wootton and LaSalle Partners, JLL (NYSE: JLL) is a company specializing in real estate advisory and investment management services.

Why Do We Steer Clear of JLL?

1. Annual sales growth of 5.7% over the last five years lagged behind its consumer discretionary peers as its large revenue base made it difficult to generate incremental demand
2. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 2.1% for the last two years
3. Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its falling returns suggest its earlier profit pools are drying up

JLL’s stock price of $250.46 implies a valuation ratio of 15x forward P/E. Check out our free in-depth research report to learn more about why JLL doesn’t pass our bar.

High-Quality Stocks for All Market Conditions

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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