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Goldman Sachs has downgraded Macy’s to “Neutral” with a $12 price target and Torrid to “Sell” with a $4 target, citing macroeconomic headwinds and tariff risks impacting U.S. apparel retailers. The firm has lowered its U.S. GDP forecast for 2025 to 0.5% and warns of a 45% chance of recession, highlighting challenges such as higher tariffs and weakening consumer demand. Off-price retailers like TJX and Burlington are noted as better positioned to navigate current market volatility.
Walmart and Costco are well-positioned to attract customers and negotiate competitive prices amid new tariffs, according to UBS analysts. The demand for essentials like groceries will likely benefit these retailers, as well as other supermarket chains and auto-parts companies. Off-price retailers such as T.J. Maxx and Burlington Stores are also expected to perform well in this environment, as larger operators can leverage their scale to widen price gaps with competitors.
Off-price retailers are significantly outperforming department stores in sales and profitability, capturing 59.5% of total sales and 76.6% of profits, according to UBS. The firm rates TJX Companies and Burlington Stores as Buys, while maintaining Sell ratings on Macy’s, Dillard’s, and Kohl’s due to weaker growth prospects. Despite a valuation premium, UBS expects off-price retailers to continue their strong performance and gain market share.
Off-price retailers are significantly outperforming department stores in both sales and profitability, capturing 59.5% of total sales and 76.6% of profits, according to UBS. The firm maintains Buy ratings for TJX Companies and Burlington Stores, while remaining bearish on department stores like Macy’s and Kohl’s due to weaker growth prospects. Despite higher valuations for off-price stocks, UBS expects their strong fundamentals to sustain this trend.
Dow Jones futures rose on Tuesday following a lighter-than-expected inflation report, with Nvidia and Tesla among early winners. Key stocks to watch include Burlington Stores, Interactive Brokers, Intuitive Surgical, and Meta Platforms, all near buy points. Walmart is also building a flat base, seeking support at its 50-day line.
UBS has upgraded Abercrombie & Fitch, Burlington Stores, Boot Barn, and Gildan Activewear to Buy, citing strong growth potential and attractive valuations in the Softlines sector for 2025. The firm anticipates that U.S. tax cuts and deregulation will boost apparel spending, while concerns over tariffs are downplayed. Additionally, Gap and Nordstrom have been upgraded to Neutral, with Gap's CEO recognized for driving change.
UBS has upgraded Abercrombie & Fitch, Burlington Stores, Boot Barn, and Gildan Activewear to Buy, citing strong growth potential and attractive valuations. The firm anticipates that U.S. tax cuts and deregulation will significantly boost apparel spending, while concerns over tariffs are deemed minimal. Additionally, Gap and Nordstrom were upgraded to Neutral, with Gap's CEO recognized for his effective leadership.
M&T Bank Corp now holds 3,089 shares of Burlington Stores, valued at $813,000, after acquiring 47 additional shares. UBS Group upgraded the stock from "neutral" to "buy," raising its target price to $360, indicating a potential upside of 26.04%. The company reported a quarterly EPS of $1.55, surpassing estimates, with revenue of $2.53 billion, a 10.5% increase year-over-year.
Big Lots, after a turbulent year marked by financial struggles, has been acquired by Gordon Brothers Retail Partners, ensuring the operation of hundreds of stores. The retailer faces challenges adapting to consumer preferences and competition from giants like Walmart and Dollar General, necessitating a rethinking of its merchandise strategy and digital investments to enhance customer engagement and experience. With the backing of Gordon Brothers, Big Lots has a chance to innovate and redefine its identity in the retail landscape.
Shares rose 1.5% early Monday, with Nvidia and Tesla leading gains. The Dow Jones Industrial Average and major indexes showed mixed trading after a funding bill was passed to avoid a government shutdown. Notable stocks to watch include BlackRock, IBM, and Amazon, with several nearing buy points.
Burlington Stores, Inc.
Companies
The information provided herein is generated by experimental artificial intelligence and is for informational purposes only.
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