|
|
|
|
||
Apparel Is a Tough Sell Right Now. These 3 Retailers Buck the Trend, According to Goldman Sachs.Apparel Is a Tough Sell Right Now. These 3 Retailers Buck the Trend, According to Goldman Sachs.Barron's (Online); New York There's no shortage of reasons to worry about apparel sales. Shoppers already refreshed much of their wardrobes last year. Inflation is forcing consumers to make tough choices , and that usually means buying essentials and pandemic-delayed services over clothes. Big players in the industry are offering steep discounts to move merchandise. No wonder then that many apparel sellers have seen their stocks tumble this year. Goldman Sachs argues that off-pricers shouldn't be among them. Analyst Brooke Roach initiated coverage on Ross Stores (ROST) and Burlington Stores (BURL) with Buy ratings today, and TJX (TJX) at Neutral, although her price targets—of $102, $183, and $70, respectively—reflect double-digit upside for all three stocks. "Today's macro backdrop provides ample market share opportunity for off-price retail, which we believe will be a trade-down beneficiary for consumers looking for attractively-priced branded product," she writes. "Heavy industry inventory levels create tailwinds for all off-price business models, even those with less developed buying programs…While we continue to see some headwinds from freight and wages, we do see some signs that these pressures are beginning to ease, alleviating a significant overhang on sector performance." She likes all three stocks, although she sees the biggest potential gains for Ross and Burlington stocks, highlighting the former's ability to grab market share and the latter's ongoing strategic transformation. For TJX, she applauds the company's "best-in-class distribution model and well-invested brand," and expects it too will be a winner in the current environment; however the stock has so far seen much less steeper losses than its off-price peers, leading her to believe that its strengths are already well understood by the market. That said, investors aren't keen on any of the stocks today. In recent trading, TJX is off 1.8% to $61.47, Ross is down 1.9% to $80.73, and Burlington is 1.2% lower to $148.48. |
return to message board, top of board |