Piper Sandler (NYSE:PIPR) has begun coverage on many consumer retail stocks, the most notable of which are Brands Holding (AKA), Allbirds (BIRD), Etsy (ETSY), Farfetch (FTCH), G-III Apparel Group (GIII), and Rent the Runway (RENT).
The analysts remarked that they “remain selective” but “believe we are approaching broadly attractive entry points.”
Piper Sandler anticipates the economy will enter a recession between 2022 and 2023. Interviews with management teams of companies being covered hint at increased concerns over macroeconomic conditions and uncertainties around spending.
Piper observed that the likelihood of downward profit revisions remains strong even though values have essentially reached their bottom on practically all criteria. This is because of rising inventory levels and pressures from the macroeconomic environment. The firm is particularly bullish on stocks that it believes will have near-term demand drivers.
Within its sector coverage, Piper is most bullish on companies that will profit from increased consumer engagement in the near future and on companies that will benefit from solid repeat consumer behavior in the long run.
The following is a list of the companies that Piper began coverage of and assigned an Overweight rating to:
Brands Holding (AKA), PT $5; shares down 32%
Allbirds (BIRD), PT $10; -5%
Warby Parker (WRBY), PT $20; +0.3%
Figs (FIGS), PT $15; -3%
G-III Apparel Group (GIII), PT $28; +0.3%
Nordstrom (JWN), PT $28; -2%
Oxford Industries (OXM), PT $110; +0.4%
Rent the Runway (RENT), PT $10; -9%
Revolve Group (RVLV), PT $42; 3%
The following businesses all began their operations with a rating of neutral:
Etsy (ETSY), PT $95; +0.2%
Farfetch (FTCH), PT $9; -6%
Peloton Interactive (PTON), PT $12; -12%
PVH (PVH), PT $68; -2%
The RealReal (REAL), PT $4; -14%
Target (TGT), PT $190; -0.8%
Walmart (WMT), PT $135; -0.3%
Out of all the companies, Stitch Fix (SFIX) was the sole company that Piper launched coverage with an Underweight rating, with a price target of $3.
Piper’s analysts summarized their observations: “Intensifying macro pressures, unpredictable spending shifts, and the ongoing balance between digital and physical sales reminds us of our favorite Wilson Philips song – Hold On.”
Featured Image: Megapixl © 4tomania
