In a new report, Deutsche Bank analyst Paul Trussell discusses the firm’s top three retail stock picks for 2016. Trussell believes this year will be about all about the low-end retail segment.
“Our best ideas are proven winners in their sector, each outperforming peers on the top-line,” he explained. “We argue that these trends are sustainable and underappreciated at current multiples, especially with catalysts ahead.”
Related Link: Dollar General Seen As Winner From Wal-Mart Store Closures
Deutsche Bank’s first top pick, Foot Locker, Inc. FL has been a leader in the sneaker trend, which Trussell says is a secular, not a cyclical, trend. He sees major potential for margin expansion as well.
The firm’s second top pick, J C Penney Company Inc JCP, has finally begin to gain some market share momentum and has opportunity for margin expansion as well.
Finally, Deutsche Bank likes Costco Wholesale Corporation COST as a top retail stock pick. In addition to margin expansion opportunities, the firm sees revenue growth drivers such as organic food and a number of catalysts, including IT modernization and the transition to Visa.
Disclosure: the author holds no position in the stocks mentioned.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
|---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
