How Ross and On Holding Can Buck That Retail Funk
The recent commentary by Wolfe Research highlights Ross Stores and On Holding as potential opportunities in the specialty retail sector, where traditional retail sentiment has been waning. As retailers navigate consumer challenges, these stocks could diverge from the broader market trend due to their unique positioning and growth strategies. This situation is relevant now as investors seek resilience in retail exposure amid fluctuating consumer behaviors, particularly as seasonality approaches in coming months.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.075 (median across 8 firms), with Goldman at the upper bound (1.12) and BofA at the lower (1.04). Wolfe Research's focus on Ross Stores and On Holding aligns with our sentiment that selective retail picks may provide an edge, especially in a tightening economy.
How firms align
Both JPMorgan and ING maintain positive outlooks, with JPMorgan's latest target at 1.10 indicating alignment with the potential for retailers like Ross to outperform under current market conditions. On the contrary, BofA’s positioning suggests caution, reflecting a more bearish stance on retail stocks.
What the data shows
Recent research indicates a shift in consumer spending patterns, which might favor discount retailers. See our insights on this trend in /research/retail_shifts for a deeper dive into market expectations.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Retail sentiment is shifting; Ross Stores may benefit.
- 02Focus on selective retail picks as potential outperformers.
- 03Consumer behavior shifts could catalyze retail stock performance.
Market implications
Investors should monitor the upcoming retail earnings calendar closely, particularly for Ross Stores. A break above 1.10 in EUR/USD could trigger bullish positioning across sectors that align with this retail sentiment shift.
Risks to this view
Should consumer spending slow more than anticipated, or if macroeconomic data releases significantly disappoint, the outlook for both Ross and On Holding could reverse, impacting broader market sentiment in retail.
Sentiment by currency
USD~EUR~JPY~GBP~Composite USD score: +0.00
Sources & References
How we cover this story