Off-price retailer stocks Ross Stores, TJX Companies and Burlington Stores are tipped by BofA for 2022 outperformance
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Bank of America thinks off-price retailers are set up for a strong 2022 performance after being held back by concerns on elevated costs.
Analyst Lorraine Hutchinson and team expect the cost burden to remain in the first half of 2022, but they do not view the bulk of the higher expenses as permanent. "Off-price is one of the only subsectors in retail that is not overearning during the recovery and we think that will be a key positive for 2022 as others face declining margins from the return of a more promotional environment," reads the BofA update.
BofA sees the most upside for Ross Stores (NASDAQ:ROST), while the 20% YTD sell-off on Burlington Stores (NYSE:BURL) is called compelling for growth investors as a high-teens EPS algorithm is anticipated to pick up again next year. Meanwhile TJX Companies (NYSE:TJX) is called a potential near-term safe haven as its willingness to raise prices is appreciated and as it is viewed it as the least exposed to the Q1 stimulus lap. The has a Buy rating slotted for ROST, BURL and TJX.
Compare key metrics on Ross Stores, Burlington Stores and TJX Companies side by side.