ASX consumer discretionary stocks have been battered so far in 2026.
The sector relies heavily on consumer confidence and everyday Australians having the disposable income to buy non-essential goods and services.
High inflation and rising interest rates have put pressure on these purchases, subsequently hurting consumer discretionary spending.
However, this downward pressure has also created value opportunities in the sector.
Two consumer discretionary shares have received buy ratings from the team at Bell Potter.
Here's what the broker is tipping for the next 12 months.
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Propel Funeral Partners Ltd (ASX: PFP)
Propel Funeral Partners is an Australian-based company that provides death care services in Australia and New Zealand. The company owns funeral homes, cremation facilities, cemeteries, and related infrastructure in almost every Australian state and New Zealand.
Its share price has fallen almost 35% year to date.
However, it now presents as a value play.
The company just released updated FY26 guidance.
Propel Funeral Partners expects FY26 revenue of $225 to $230 million and operating EBITDA of $54.5 to $56.5 million.
The guidance was slightly weaker than the market expected. Revenue is 3% to 4% below analyst and market forecasts.
Profit (EBITDA) is approximately 7% below market expectations and 4% below Bell Potter's own forecast.
The main issue is lower funeral volumes (fewer funerals than expected).
Bell Potter had expected funeral volumes to grow in the second half of FY26, but the guidance implies volumes could actually fall by around 1%.
On the positive side, the amount of revenue earned per funeral (ARPF) is still increasing, up about 2% on a comparable basis.
Based on this guidance, Bell Potter retained its buy recommendation on the consumer discretionary stock, but lowered its price target to $3.80 (previously $5.90).
Despite lowering its price target, the broker still projects 12% upside in the next 12 months.
Eagers Automotive Ltd (ASX: APE)
Eagers Automotive is the largest automotive retailing group in the Australian market.
Its share price has fallen 15% year to date.
However, Bell Potter recently placed a $28 price target on this ASX consumer discretionary stock, indicating 34% upside from current levels.
The broker said the stock looks reasonably valued on its P/E ratio.
Back in early May, Eagers Automotive announced the completion of its strategic investment in CanadaOne Auto, one of Canada's largest dealership groups, through the acquisition of 65% of the shares in its holding company.
Bell Potter's view on the CanadaOne deal appears to be cautiously positive long term, but more conservative on near-term profitability than before.
We also see the recent trading update at the AGM as effectively "cleansing" the market as the H1 result has now been largely flagged – so there should be no surprises – and the sell-side has downgraded 2026 forecasts for higher bailment charges and the negative forex impact from CanadaOne.
