Displaying items by tag: xrt

(New York)

Since their low in 2017, retail stocks have been on a great run, rising about 35%. The question for investors is where the market goes from here. After easily outpacing the market, retail could face some headwinds, though analysts are still generally positive. Some say cost pressures are rising quickly and will hurt earnings, while others say such assumptions are overstated and that earnings should be fine.

FINSUM: Rising consumer confidence has really helped lift the sector out of its doldrums, but any economic peak could also prove the high point for retail. If you think this cycle has already peaked, then retail would seem vulnerable.

(New York)

2017 was a terrible year for the retail sector. It was nothing short of an apocalypse. Thousands for stores were closing, dozens of brands going bankrupt, and big stock sell-offs. It was the first phase of the predicted meltdown to be caused by the shift to ecommerce. However, this year retail stocks have soared, with the leading retail ETF (XRT) up 35% from its low last year. That said, there are still some great buys. The sector’s overall P/E is still just 16.4, well below its historical average of 18.8. Store closings have stabilized margins and consumer confidence and spending are rising, a strong proposition for the sector. Some good names to look at are Kohl’s, Gap, and Michael Kors.

FINSUM: Retailers are starting to figure out how to navigate the new ecommerce-driven paradigm, and the sector’s future is looking much brighter than it did 18 months ago.