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Valentine’s Day isn’t just about love and romance—it’s also big business. Think about it: couples splurge on fancy dinners, premium chocolates fly off the shelves, and jewelry stores see a surge in “I promise this isn’t last-minute” purchases. Even dating apps experience a boost as people try to find a match before the big day.
Valentine’s Day is also a big deal for the stock market. As per a research by Seeking Alpha, since 1950, historical data suggests that major indices, including the S&P 500 and Dow Jones Industrial Average, tend to get a short-term boost from increased consumer spending leading up to February 14th. This phenomenon, often referred to as the “Valentine’s Day effect,” is fueled by a surge in spending across various industries such as luxury goods, dining, travel, and beauty.
According to the National Retail Federation (NRF), consumer spending for Valentine’s Day is expected to hit a record $27.5 billion, with the average shopper shelling out $188.81. Popular gifts include jewelry, chocolates, flowers, greeting cards, and dining experiences, all of which contribute to a short-term boost for companies catering to these romantic indulgences. Data also suggests that on average, the S&P 500 has gained around 0.21% in the four trading days leading up to February 14th, with a peak of 0.42% the day after, before settling at 0.15% three days later.
But rather than just spending money this Valentine’s Day, why not make your money work for you? Analysts from Morningstar and Seeking Alpha have identified a handful of stocks that could see a boost from Valentine’s Day spending. These stocks come from industries that benefit from increased consumer demand and have strong fundamentals, making them worth a look for both short-term gains and long-term value.
Brinker International, Inc. (NYSE: EAT) – The Comeback King of Casual Dining
Brinker International, the parent company of Chili’s Grill & Bar and Maggiano’s Little Italy, has cooked up an impressive turnaround story. The restaurant giant has delivered a staggering 336% return over the past year, fueled by sizzling sales growth and expanding margins.
The company’s recent strategy has been a masterclass in execution. By simplifying Chili’s menu, investing in quality ingredients, and launching viral campaigns like the ‘Marg of the Month’ program, Brinker has drawn in younger, budget-conscious diners. Its Big Smasher burger and Triple Dipper appetizer combo have dominated TikTok, driving foot traffic and online engagement.
In Q3 2024, Brinker’s revenue surged 12.49% year-over-year to $1.2 billion, while earnings more than doubled to $2.80 per share, crushing Wall Street expectations of $1.56 per share. Comparable-store sales at Chili’s soared 31%, thanks to streamlined kitchen operations and a focus on efficiency. The company’s operating margin jumped from 5.8% to an impressive 12.4%, reflecting its disciplined cost management.
Brinker’s turnaround is a case study in restaurant management. CEO Kevin Hochman’s focus on simplicity and customer experience has paid off, with free cash flows returning to record highs. With its upgraded kitchen information systems and data-driven approach, Brinker has set the benchmark for the industry—and copycats are sure to follow.
The Cheesecake Factory Incorporated (NYSE: CAKE) – A Sweet Deal for Investors
What’s Valentine’s Day without a little indulgence? The Cheesecake Factory (CAKE) is not just about its legendary cheesecakes; the company owns a diverse portfolio of brands, including North Italia and Blanco Cocina + Cantina.
CAKE has delivered a 62.7% return over the past year, with strong momentum heading into 2025. In Q3 2024, the company posted a 45% rise in adjusted net income to $28.2 million and a 49% increase in earnings per share to $0.58, well above analyst expectations of $0.49. Revenue hit $865 million, driven by increased foot traffic and higher menu prices.
While competitors struggle with rising costs, CAKE has maintained its margins and positioned itself as an “experiential” dining brand, attracting customers who are willing to spend on premium dining experiences. Analysts at Citigroup have highlighted CAKE as a top pick in the fast-casual sector, with forward EPS growth projected at 63.2%, significantly outpacing the industry average.
With a forward P/E of 17.1 and a PEG ratio of 1.51—both trading at a discount to the broader consumer sector—CAKE could be a compelling option for both growth and income investors. The company’s 1.9% dividend yield adds another layer of sweetness to the deal.
Estée Lauder: A Valentine’s Pick with a Little Makeover
Looking for a stock to fall in love with this Valentine’s Day? Estée Lauder might just be your perfect match—though, like any relationship, it’s had its ups and downs.
Once a market darling, the beauty giant soared in 2020-21, only to come crashing back to pre-pandemic levels. Weak consumer spending, especially in China, has weighed on its performance, with revenue slipping 6.4% YoY to $4 billion and skincare sales dropping 12%. Even travel retail, once a stronghold, has struggled.
But here’s why it could still be a love worth rekindling: Estée Lauder recently beat earnings expectations with an adjusted EPS of $0.62 (vs. $0.32 expected), thanks to cost-cutting under its “Beauty Reimagined” strategy. Analysts expect 7% annual sales growth over the next decade, and the stock is currently trading at a 30% discount to fair value.
Sure, there’s been some heartbreak—like a dividend cut from $0.66 to $0.35 per share—but with a 4-star rating and a wide economic moat, Estée Lauder could be a long-term love story in the making. If China’s consumer market bounces back, this beauty stock might just steal your heart all over again.
Beyond the Short-Term Gains: A Long-Term Investment Strategy
While the Valentine’s Day rally can offer opportunities for short-term gains, it’s important to remember that investing is a marathon, not a sprint. The five stocks mentioned above are not just Valentine’s Day plays; they represent companies with solid fundamentals and long-term growth potential. By focusing on quality companies with strong business models, investors can build a portfolio that can weather market fluctuations and deliver sustainable returns over time.
A Gift That Keeps on Giving: Investing in Your Future
Instead of just buying flowers that will wilt or chocolates that will be eaten, consider giving a gift that can grow in value over time: the gift of stock. By investing in solid companies, you’re not just buying a piece of paper; you’re investing in the future. So, this Valentine’s Day, consider adding a touch of green to your celebrations by exploring the world of investing. It might just be the most romantic gesture of all.
Disclaimer – This article draws from sources such as the Seeking Alpha, Morning Star other reputed media houses. Please note, this blog post is intended for general educational purposes only and does not serve as an offer, recommendation, or solicitation to buy or sell any securities. It may contain forward-looking statements, and actual outcomes can vary due to numerous factors. Past performance of any security does not guarantee future results.This blog is for informational purposes only. Neither the information contained herein, nor any opinion expressed, should be construed or deemed to be construed as solicitation or as offering advice for the purposes of the purchase or sale of any security, investment, or derivatives.The information and opinions contained in the report were considered by VF Securities, Inc.to be valid when published. Any person placing reliance on the blog does so entirely at his or her own risk, and does not accept any liability as a result.Securities markets may be subject to rapid and unexpected price movements, and past performance is not necessarily an indication of future performance. Investors must undertake independent analysis with their own legal, tax, and financial advisors and reach their own conclusions regarding investment in securities markets.Past performance is not a guarantee of future results
