The University of Michigan reported that the preliminary index for consumer sentiment jumped to 54.4 in July from 49.5 in June. The Zacks Consensus Estimate was 51. This marked the highest reading of the index since February 2026. A decline in energy cost is the primary reason for this uptick.
The subindex for current economic condition rose to 54.9% in July from 47.7% in June. The subindex for consumer expectations rose to 54% in July from 50.7% in June. The 1-year inflation index fell to 4.2% in July from 4.6% in June. The long-term 5-year inflation index remained the same sequentially at 3.3% in July.
At this stage, we narrowed our search to five consumer discretionary stocks with a favorable Zacks Rank for investment in the second half of 2026. These are: Cintas Corp. CTAS, Caesars Entertainment Inc. CZR, Norwegian Cruise Line Holdings Ltd. NCLH, News Corp. NWSA and Viking Holdings Ltd. VIK. Each of our picks currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The chart below shows the price performance of our five picks year to date.
Cintas Corp.
Cintas is well-positioned to benefit from the solid momentum across its segments. Penetration of additional products and services into existing customers is aiding the Uniform Rental and Facility Services segment. Improved demand for AED Rental is driving the First Aid and Safety Services segment.
CTAS’ focus on the enhancement of its product portfolio, along with investments in technology and automation to improve efficiencies in existing facilities, should continue to drive its performance. For instance, CTAS’ investment in SmartTruck technology continues to provide route optimization and improved efficiencies.
Also, Cintas has been investing in garment-sharing technology, myCintas and SAP systems for a while now. CTAS continues to invest in strategic sourcing and Six Sigma process initiatives to improve cost efficiency and offset external pressures such as tariffs or inflation.
Cintas has an expected revenue and earnings growth rate of 8.2% and 10.9%, respectively, for the current year (ending May 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 1.1% over the last seven days.
Caesars Entertainment Inc.
Caesars Entertainment is benefiting from improving Las Vegas demand, supported by strong group and convention activity, sequentially firmer leisure trends and a more robust entertainment calendar. Also, the inclusion of Caesars Windsor, the opening of Harrah’s Oklahoma and the Tahoe redevelopment bode well for CZR.
To drive digital expansion, CZR is emphasizing iCasino offerings, universal-wallet adoption, Caesars Rewards cross-selling and disciplined customer acquisition. Lower capital spending and expiring partnership costs are expected to support CZR’s cash flow.
Caesars Entertainment has an expected revenue and earnings growth rate of 2.7% and 67.5%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has remained the same over the last 30 days.
Norwegian Cruise Line Holdings Ltd.
Norwegian Cruise Line is balancing long-term investments with near-term demand headwinds. NCLH’s Premium brands Regent Seven Seas and Oceania continue to attract higher-spending guests.
Fleet expansion, private destinations and commercial upgrades support future pricing power and onboard revenues. Cost-cutting initiatives, including $125 million in annualized SG&A savings, should improve NCLH’s margins.
Great Stirrup Cay remains a controlled destination that can capture incremental guest spending through food, beverage and activities. NCLH noted that Great Tides Waterpark remains on track to open later in summer 2026 and described it as a demand driver moving into 2027.
Norwegian Cruise Line has an expected revenue and earnings growth rate of 3.1% and -18.5%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.6% over the last seven days.
News Corp.
News Corp is benefiting from growth in Dow Jones professional information and recurring subscriptions, supported by higher digital advertising and pricing actions. Digital Real Estate is improving yield at Realtor.com through premium agent products and faster product iteration, while REA continues to lift NWSA’s pricing and expand add-on services.
NWSA controls large archives of journalism and datasets that AI platforms seek for provenance and ongoing updates. Management cited a recent deal with Meta Platforms that complements its partnership with OpenAI, and said discussions with additional AI companies have advanced.
NWSA also expects to receive its share of proceeds from a $1.5 billion Anthropic settlement starting later in calendar 2026. These arrangements are positioned as high-margin because they leverage existing content, while AI tools are also being embedded in products such as Factiva and Realtor.com to improve usability over time.
News Corp has an expected revenue and earnings growth rate of 4.6% and 28.5%, respectively, for the current year (ending June 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 0.9% over the last 60 days.
Viking Holdings Ltd.
Viking Holdings is benefiting from strong consumer demand and a solid booking environment. VIK is banking on affluent customers to see it through the current market downturn. Also, the rise in onboard spending bodes well.
VIK is focusing on fleet expansion and geographic diversification to drive growth. The company has been focusing on strategically enhancing the guest experience through smart investments and digital innovations across its fleet, aiming to maximize guest satisfaction and operational efficiency.
VIK’s marketing is fortified by digital industry tools that provide programmatic execution, machine learning capabilities, look-alike prospecting, online-to-offline conversions, emerging AI-supported functionality and data-driven marketing attribution.
Viking Holdings has an expected revenue and earnings growth rate of 13.2% and 27.2%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.6% over the last seven days.
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Cintas Corporation (CTAS) : Free Stock Analysis Report
News Corporation (NWSA) : Free Stock Analysis Report
Caesars Entertainment, Inc. (CZR) : Free Stock Analysis Report
Norwegian Cruise Line Holdings Ltd. (NCLH) : Free Stock Analysis Report
Viking Holdings Ltd. (VIK) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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