Nomura Securities on Retailing/Specialty Stores: June Sales Preview
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Price: $140.69 -2.64%
Rating Summary:
36 Buy, 8 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
Rating Summary:
36 Buy, 8 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
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Nomura Securities on Retailing/Specialty Stores: June Sales Preview
Analyst, Paul Lejuez, said, "Based on our channel checks, we believe performance in June was not much different than the tepid trends in May. June is the largest month of 2Q, so we could see some earnings revisions. We believe momentum continued at TJX Cos (NYSE: TJX) and Ross Stores (Nasdaq: ROST) during June, despite slower trends in other retail sectors. ICSC data shows the avg 2-year stack at ~5.5% in June, below the May trend of ~6.5%. Mall traffic data also indicates that the month wasn’t great, with month-to-date traffic down 1% vs. down 2% LY. American Eagle (NYSE: AEO) and Nordstrom (NYSE: JWN) are our top picks. For AEO, Trading at ~5.5x our F12E EBITDA and with an 11% FCF yield, we believe the risk/reward is very favorable. For JWN, Trading at less than 6x our F12E EBITDA, we believe the valuation is attractive for this strong retail franchise that boasts one of the highest ROIC in our coverage group."
Analyst, Paul Lejuez, said, "Based on our channel checks, we believe performance in June was not much different than the tepid trends in May. June is the largest month of 2Q, so we could see some earnings revisions. We believe momentum continued at TJX Cos (NYSE: TJX) and Ross Stores (Nasdaq: ROST) during June, despite slower trends in other retail sectors. ICSC data shows the avg 2-year stack at ~5.5% in June, below the May trend of ~6.5%. Mall traffic data also indicates that the month wasn’t great, with month-to-date traffic down 1% vs. down 2% LY. American Eagle (NYSE: AEO) and Nordstrom (NYSE: JWN) are our top picks. For AEO, Trading at ~5.5x our F12E EBITDA and with an 11% FCF yield, we believe the risk/reward is very favorable. For JWN, Trading at less than 6x our F12E EBITDA, we believe the valuation is attractive for this strong retail franchise that boasts one of the highest ROIC in our coverage group."
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