GBA ANNOUNCING 1ST WOT INDEX!--- GET WOT!
WORK
GOING OUT
TRAVEL
THE KEYS TO LIFE>
Today’s retail investors should take the same approach, embracing WOT, or work, going out, and travel.
That is according to Piper Sandler analyst Edward Yruma, who initiated coverage on a number of retail stocks in what he called an environment characterized by “intensifying macro pressures, unpredictable spending shifts” and other difficulties.
He says that despite continuing fear of a recession and a decline in consumer spending, Wall Street’s forecasts for earnings don’t reflect the pain retailers will suffer as the broader backdrop worsens, potentially forcing stores to offer more discounts and other promotional offers. The stocks could come under pressure, he argues, as analysts adjust their calls to reflect that reality.
That said, he does note that valuations look fairly attractive, given the broad industry selloff, and because more resilient names have been hurt by the overwhelming negative sentiment.
Yruma writes that “in a highly uncertain (and likely pressured) consumer macro environment, we remain most constructive on stocks that have near-term demand drivers. Our W.O.T. (work, going out, and travel) framework focuses on companies that will benefit from higher activity levels.” He also likes companies such as FIGS FIGS–3.26%(FIGS), the medical-scrubs retailer, with subscription-based operations that exhibit “strong repeat consumer behaviors.”
His favorite stocks include NordstromJWN–3.84%(JWN) and Revolve (RVLV), both rated Overweight, which he says should continue to benefit from people increasingly going out and returning to work in the second half of the year. Nordstrom—a Barron’s favorite—particularly “has improved execution, and comparisons remain easy,” he said.
He also has an Overweight rating on Warby ParkerWRBY+3.28%(WRBY), which he thinks “should continue to benefit from improving store traffic trends and a push into broader eye care solutions.”
WORK
GOING OUT
TRAVEL
THE KEYS TO LIFE>
Today’s retail investors should take the same approach, embracing WOT, or work, going out, and travel.
That is according to Piper Sandler analyst Edward Yruma, who initiated coverage on a number of retail stocks in what he called an environment characterized by “intensifying macro pressures, unpredictable spending shifts” and other difficulties.
He says that despite continuing fear of a recession and a decline in consumer spending, Wall Street’s forecasts for earnings don’t reflect the pain retailers will suffer as the broader backdrop worsens, potentially forcing stores to offer more discounts and other promotional offers. The stocks could come under pressure, he argues, as analysts adjust their calls to reflect that reality.
That said, he does note that valuations look fairly attractive, given the broad industry selloff, and because more resilient names have been hurt by the overwhelming negative sentiment.
Yruma writes that “in a highly uncertain (and likely pressured) consumer macro environment, we remain most constructive on stocks that have near-term demand drivers. Our W.O.T. (work, going out, and travel) framework focuses on companies that will benefit from higher activity levels.” He also likes companies such as FIGS FIGS–3.26%(FIGS), the medical-scrubs retailer, with subscription-based operations that exhibit “strong repeat consumer behaviors.”
His favorite stocks include NordstromJWN–3.84%(JWN) and Revolve (RVLV), both rated Overweight, which he says should continue to benefit from people increasingly going out and returning to work in the second half of the year. Nordstrom—a Barron’s favorite—particularly “has improved execution, and comparisons remain easy,” he said.
He also has an Overweight rating on Warby ParkerWRBY+3.28%(WRBY),
which he thinks “should continue to benefit from improving store traffic trends and a push into broader eye care solutions.”