It’s Not All Carnage In Retail
there is massacre in retail Be sure but not all victims are within it. Be it branding, positioning, DTC sales or a combination of all three in the retail world, we are set up to outperform in the coming year. The three stocks we’re focusing on today have recently reported earnings, all beat their expectations, and are all getting the attention of analysts. In our view, the retail sector is facing some adversity which will help the industry to end up weak hands and leave the winners in a better position than they are now.
JP Morgan says Ulta is a winner!
upside down beauty (NASDAQ: ULTRA, is one of the more prominent Winner in Mall Space Having gained market share from traditional cosmetics companies like Revlon. This, coupled with an increase in social gatherings, is on a growth trajectory amidst a dark consumer background. In JPMorgan’s eyes, the stock is a winner and one of two favorites in the sector.
“We expect the stock to look forward to a strong ‘cyclical upsurge’ as COVID-19 fades and event-starved Americans continue to benefit from this boom in social gatherings/experiences with beauty (and apparel) drown.”
Ulta Beauty has received at least 10 shoutouts from 22 analysts since its Q1 report, including two from JPMorgan. In the first, the company raised its price target to $490 compared to the $458 marketbeat.com consensus, and the second is a doubling of the same sentiment. JPMorgan carries an overweight rating compared to the broad consensus of Weak Buy but it is driving sentiment and price targets higher. Marketbeat.com’s consensus points to a roughly 16% uptrend for the stock and it is trending higher than the 30- and 90-day comparisons.
Morgan Stanley gets on the defensive with Dollar General
Morgan Stanley Advanced Dollar General (NYSE: DG) Teao equal weight plus weight indicating that it is one of its more undervalued names defensive stock coverage universe. In his view, the company is a high-quality defensive name that comes with some offensive features which include the potential for improving physical margins despite the economic slowdown.
“It’s arguably our most defensive, counter-cyclical company — yet while the stock has outperformed the market year-over-year, it has outperformed the other defensive stocks in our coverage.”
Morgan Stanley’s overweight rating compares well with the broad consensus of Firm Buy, as does the new price target. The new price target of $250 is $5 ahead of the Marketbeat.com consensus which is up from last year, 3 months ago and last month and is about 5% upside for the stock price.
AutoZone upgraded on “sustainable” revenue and earnings growth
Morgan Stanley also upgraded autozone (Nasdaq: AZO, For more weight than the same weight stating that the company has more durable Increase in revenue and earnings the vision. The firm thinks the stock has at least 20% upside ahead of it which is well above the current consensus target of $2,142. AutoZone is also a top pick in Wells Fargo that holds an overweight rating as well as Wall Street’s second highest rating. price target.
“Ezo is a self-help story (its business playbook is working), the business has a history of prudent expense management, and DIY auto is a defensive category. These factors enhance Ezo’s earnings visibility amid an uncertain macro background. Furthermore, we believe in the pricing power of AZO and believe there is more upside to the DIFM than Mega Hub strategy.”