Shares of Gap Inc. and L Brands Inc. edged higher in midday trade Monday, bucking the broad weakness in the retail sector, after the apparel retailers were upgraded at Piper Jaffray, which cited evidence of accelerating momentum in holiday spending trends. Analyst Neely Tamminga raised her ratings on both Gap and L Brands to neutral, after having a bearish underweight rating for Gap since Sept. 30, 2015 and for L Brands since May 5, 2016. Tamminga wrote in a note to clients that she believes a “broad-based relief is on the horizon for consumer discretionary spending, of which each [Gap] and [L Brands] could participate in by the rising tide.” With Gap’s stock tumbling 17% since reporting third-quarter results on Nov. 17 through Friday, Tamminga said she believes the price is now “appropriately reflecting concerns on fundamentals.” She said L Brands valuation is currently at the low end of its three-year range, which suggests they are already pricing in fundamental disappointing in the near term. Gap’s stock was up 0.3% Monday and L Brands shares tacked on 0.2%, while the SPDR S&P Retail ETF slid 0.8% and the S&P 500 index slipped 0.3%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
From:: Stock Market News
