Why Did Analysts Upgrade Retail Stocks?
2022.06.17 12:16
There is carnage in the retail sector to be sure, but not all within it are suffering. Be it branding, positioning, DTC sales, or a combination of all three, some in the retail world will outperform in the coming year.
The three stocks we’re focused on today have all recently reported earnings, all beaten their expectations, and all are getting attention from the analysts. In our view, the retail sector is facing some headwinds that will help the industry finish shaking out the weak hands and leave the winners in even better positions than they are now in.
JP Morgan Says Ulta Is A Winner
Ulta Beauty (NASDAQ:ULTA) is one of the more prominent victors in the Mall space, having gained market share from traditional cosmetics companies like Revlon (NYSE:REV). This, along with the upswing in social gatherings, has the company on track for growth amid a darkening consumer backdrop. In the eyes of JP Morgan, the stock is a winner and one of two favorites in the sector.
“We expect the stock to continue to look forward to a strong ‘cyclical upswing’ as COVID-19 fades and event-starved Americans immerse into social gatherings/experiences with beauty (and apparel) benefiting from this surge.”
Ulta Beauty has received at least ten shout-outs from 22 analysts since the Q1 report, including two from JP Morgan. In the first, the company raised its price target to $490 compared to the $458 Marketbeat.com consensus, and the other is a doubling-down of that same sentiment.
JP Morgan carries an Overweight rating compared to the broader consensus of weak Buy, but that sentiment and the price target are trending higher. The Marketbeat.com consensus implies a 16% upside for the stock, trending higher in the 30 and 90-day comparisons.
ULTA Stock Chart.
