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By Senad Karaahmetovic
Citi analyst Paul Lejuez made a sequence of ranking modifications within the agency’s analysis protection of North America Attire/Footwear/Textiles.
The analyst says stars at the moment are “misaligned” after a sturdy 2021 12 months. A pullback in discretionary classes is going down on the again of the slowing demand, which is a results of the shortage of stimulus and the upper costs.
“Corporations are dealing with higher-than-expected strain following escalation of gas/provide chain prices ensuing from the warfare in Ukraine. Corporations ought to look to go via increased prices to the patron, however this may probably be tougher than it was in 2021 given excessive stock ranges relative to gross sales. That is very true in attire the place promos are already rising (cool climate in 1Q didn’t assist). It’s this dynamic that’s driving vital reductions to our earnings estimates for a number of corporations,” Lejuez mentioned in a consumer be aware.
The analyst made strikes after Walmart (NYSE:), Hole (NYSE:), and Goal (NYSE:) all reported extra stock.
All in all, Citi downgraded Abercrombie & Fitch (NYSE:), American Eagle Outfitters (NYSE:), Below Armour (NYSE:), and Kohl’s (NYSE:) to Impartial from Purchase. The analyst additionally double-cut Carter’s (NYSE:) to Promote from Purchase, whereas Hole and Youngsters’s Place (NASDAQ:) are additionally downgraded to Promote from Impartial.
City Outfitters (NASDAQ:) is the one inventory that’s reaffirmed at Purchase.
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