Group 1 - Deutsche Bank has resumed coverage of key stocks in the global brand, discount retail, and professional beauty sectors, expressing optimism as it enters 2026, anticipating a "risk-on" macro environment despite potential fluctuations [1] - Analyst Christina Katay noted that the revenue trend in the first half of the year will remain robust due to favorable weather conditions and increased tax refunds, which are seen as drivers for same-store sales growth [1] - The bank estimates that the "Great Beauty Act" will increase tax refunds by approximately $55 billion, with total tax refunds in 2024 projected at $461 billion [1] Group 2 - The expected tax refunds will primarily benefit low- to middle-income consumers facing cost-of-living challenges, while affluent households are anticipated to benefit from increased state and local tax (SALT) deductions [2] - Deutsche Bank has assigned a "Buy" rating to stocks including Amphenol (AS.US), Birkenstock (BIRK.US), Ulta Beauty (ULTA.US), Ralph Lauren (RL.US), Ross Stores (ROST.US), and TJX Companies (TJX.US) [2] - The bank holds a more conservative view on stocks such as Bath & Body Works (BBWI.US), Burlington Stores (BURL.US), Nike (NKE.US), and Lululemon (LULU.US), assigning them a "Hold" rating [2]

Core Insights - Ross Stores, Inc. (ROST) reported a strong third-quarter fiscal 2025 performance with a 7% increase in comparable store sales and a 10% rise in total revenues to approximately $5.6 billion, significantly exceeding consensus estimates [1][9] - The company achieved earnings per share (EPS) of $1.58, up from $1.48 a year ago, indicating the resilience of its operating model [1] Sales Performance - The growth in comparable store sales was broad-based, with cosmetics, shoes, and ladies' apparel leading the performance, reflecting effective merchandising and the appeal of Ross Stores' value proposition in an inflation-aware environment [2] - The ladies' segment, previously a laggard, showed accelerated growth above the chain average during the fiscal third quarter [2] Expansion and Future Guidance - Ross Stores continued its expansion by opening 90 net new stores, including Ross and dd's DISCOUNTS, to capture existing and new market demand [3] - The company raised its guidance for fiscal fourth-quarter comparable store sales to 3-4% and indicated positive trends in inventory builds ahead of the holiday season [3] Strategic Outlook - As Ross Stores enters the critical holiday season, the company is positioned with strong traffic, healthy inventory levels, and a refined branded strategy, which may help sustain momentum despite potential macroeconomic challenges [4] - The off-price retail model historically performs well in value-seeking environments, suggesting that Ross Stores may continue to outperform its peers [4] Stock Performance - Ross Stores' shares have gained 23.4% over the past three months, outperforming the industry average increase of 4.9% [5] - The stock currently trades at a forward 12-month P/E ratio of 26.61X, which is lower than the industry average of 29.92X, indicating a modest discount relative to peers and the broader consumer staples sector [10]

Core Insights - Ross Stores (ROST) is outperforming its peers in the Retail-Wholesale sector with a year-to-date return of approximately 19.8%, compared to the sector average gain of 7.4% [4] - The Zacks Rank for Ross Stores is 2 (Buy), indicating a favorable outlook based on earnings estimate revisions and improving earnings sentiment [3] Company Performance - Over the past three months, the Zacks Consensus Estimate for Ross Stores' full-year earnings has increased by 4.3%, reflecting positive analyst sentiment [4] - Ross Stores belongs to the Retail - Discount Stores industry, which has an average year-to-date gain of 6.4%, further highlighting ROST's strong performance [6] Sector Comparison - The Retail-Wholesale sector, which includes 196 individual stocks, is currently ranked 9 in the Zacks Sector Rank [2] - Another stock in the Retail-Wholesale sector, Bed Bath & Beyond (BBBY), has also shown strong performance with a year-to-date return of 14.6% and a Zacks Rank of 2 (Buy) [5]

Group 1 - The core viewpoint indicates a change in the setup for Ross Stores (ROST), with improved traffic and core demand, suggesting a potential positive shift in performance compared to peers [1] - Previously, Ross Stores was facing margin weakness and underperforming relative to competitors, but the current analysis suggests a more favorable outlook [1] Group 2 - The author emphasizes a diverse investment background, utilizing various strategies such as fundamental, technical, and momentum investing to enhance the investment process [1]

Core Insights - The holiday shopping season of 2025 highlighted the resilience of consumer demand despite economic concerns, with shoppers prioritizing value and convenience [1][4] - Retailers adapted to changing consumer behaviors by enhancing delivery logistics and utilizing digital and physical channels, leading to innovative shopping experiences [2] - Targeted promotions and loyalty programs were employed to stimulate demand while maintaining profitability, with subscription perks and buy-now-pay-later options appealing to value-conscious consumers [3] Retail Sales Performance - U.S. holiday sales for November and December are projected to exceed $1 trillion for the first time, with year-over-year growth estimated at 3.7%-4.2%, translating to total sales of $1.01-$1.02 trillion [4] - Online spending during Cyber Week increased by 7.7% year-over-year, reaching $44.2 billion, indicating strong digital engagement [4][8] Retailer Strategies and Stock Recommendations - Retailers like Amazon, Ross Stores, Walmart, and Costco are highlighted as strong contenders for growth in 2026, leveraging innovative strategies and consumer engagement [5][8] - Amazon's dominance in e-commerce is supported by its Prime ecosystem and technological innovations, with sales growth estimates of 11.9% for the current year and 11.3% for the next [6][7] - Ross Stores is benefiting from its off-price model and effective merchandising, with sales growth estimates of 6% for the current year and 5.4% for the next [11][12] - Walmart's omnichannel approach and focus on low prices position it well for value shoppers, with sales growth estimates of 4.5% for both the current and next year [15][16] - Costco's membership model drives strong traffic and loyalty, with sales growth estimates of 7.5% for the current year and 7.3% for the next [19][20]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Economic Overview - The U.S. economy is in a transition phase with easing financial conditions and improving consumer sentiment, supported by a recent rate cut from the Federal Reserve aimed at fostering economic growth as inflation moderates [1] - Households remain budget-conscious, creating a favorable environment for discount retailers as consumers seek affordable options [2] Discount Retail Sector Insights - Discount retailers are experiencing a "trade-down" effect, with consumers across various income levels increasingly opting for value-oriented choices, leading to steady foot traffic [2] - Structural advantages such as lean store formats, efficient supply chains, and digitization enhance the responsiveness of discount retailers to consumer demand [3] - Investments in data analytics and AI are optimizing operations and personalizing customer experiences, contributing to margin stability and competitive pricing [3] Future Outlook for Discount Retailers - The outlook for discount retailers is promising as easing monetary policy is expected to positively influence consumer spending and corporate profits by 2026 [4] - Key players identified for potential investment include Ross Stores, Dollar General, Costco, and Burlington Stores, all of which are well-positioned to benefit from cautious consumer spending [4][7] Company-Specific Highlights Ross Stores - Ross Stores is leveraging its off-price model, with strong branded assortments and effective merchandising driving customer engagement and traffic [5] - The Zacks Consensus Estimate indicates a 6% growth in sales and 1.7% growth in EPS for the current financial year, with further growth expected in the next fiscal year [6] Dollar General - Dollar General's value-and-convenience proposition is expanding its appeal, supported by strategic initiatives that enhance profitability and cash generation [10] - The Zacks Consensus Estimate suggests a 4.7% growth in sales and 6.6% growth in EPS for the current financial year, with continued growth anticipated [11] Costco - Costco's membership-driven model is enhancing traffic and brand loyalty, supported by investments in digital capabilities and operational technology [14] - The Zacks Consensus Estimate forecasts a 7.5% growth in sales and 11.3% growth in EPS for the current financial year, with similar growth expected in the next fiscal year [15] Burlington Stores - Burlington Stores is making progress in its off-price transformation, with strong demand and a robust pipeline of new store openings [18] - The Zacks Consensus Estimate indicates an 8% growth in sales and 18.4% growth in EPS for the current financial year, with further growth projected [19]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Ross Stores (ROST) - Ross Stores currently holds a Momentum Style Score of A, indicating strong momentum characteristics [2] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for potential outperformance in the market [3] Performance Metrics - Over the past week, ROST shares increased by 0.86%, while the Zacks Retail - Discount Stores industry rose by 1.73% [5] - In a longer timeframe, ROST's monthly price change is 13.16%, outperforming the industry's 12.84% [5] - Over the last quarter, ROST shares have risen by 25.35%, and by 19.01% over the past year, compared to the S&P 500's increases of 5.09% and 14.7%, respectively [6] Trading Volume - ROST's average 20-day trading volume is 3,203,170 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, 6 earnings estimates for ROST have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $6.19 to $6.43 [9] - For the next fiscal year, 6 estimates have also moved upwards, indicating positive sentiment around ROST's earnings potential [9] Conclusion - Given the strong performance metrics and positive earnings outlook, ROST is identified as a 2 (Buy) stock with a Momentum Score of A, making it a promising candidate for near-term investment [11]

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on Ross Stores (ROST), and emphasizes the importance of using these recommendations in conjunction with other analytical tools like the Zacks Rank. Brokerage Recommendations - Ross Stores has an average brokerage recommendation (ABR) of 1.50, indicating a consensus between Strong Buy and Buy, based on 20 brokerage firms' recommendations [2] - Out of the 20 recommendations, 15 are Strong Buy, accounting for 75% of the total recommendations [2] Limitations of Brokerage Recommendations - Solely relying on brokerage recommendations for investment decisions may not be wise, as studies show limited success in guiding investors towards stocks with the best price increase potential [5] - Brokerage firms often exhibit a positive bias in their ratings due to vested interests, leading to a disproportionate number of Strong Buy recommendations compared to Strong Sell [6][11] Zacks Rank as an Alternative - The Zacks Rank categorizes stocks into five groups based on earnings estimate revisions, providing a more effective indicator of a stock's price performance in the near future [8][12] - The Zacks Rank is distinct from the ABR, as it is a quantitative model that reflects timely earnings estimate revisions, while the ABR may not always be up-to-date [10][13] Current Earnings Estimates for Ross Stores - The Zacks Consensus Estimate for Ross Stores has increased by 4.1% over the past month to $6.43, indicating growing optimism among analysts regarding the company's earnings prospects [14] - This increase in consensus estimates, along with other factors, has resulted in a Zacks Rank 2 (Buy) for Ross Stores, suggesting a positive outlook for the stock [15]

Core Viewpoint - The article summarizes the latest analyst ratings from Wall Street, highlighting significant upgrades, downgrades, and new coverage that could impact market sentiment and investment decisions [1][6]. Upgrades - Oppenheimer upgraded General Electric Energy (GEV) from "Hold" to "Outperform," setting a target price of $855, citing improved pricing and sales, along with enhanced factory utilization and operational efficiency [5]. - JPMorgan raised PepsiCo (PEP) from "Neutral" to "Overweight," increasing the target price from $151 to $164, due to the company's accelerated innovation and marketing spending [5]. - HSBC upgraded AbbVie (ABBV) from "Hold" to "Buy," with a target price increase from $225 to $265, noting the company's growth momentum and strong execution capabilities [5]. - Morgan Stanley raised Terex (TEX) from "Equal Weight" to "Overweight," with a target price increase from $47 to $60, as the company's performance has rebounded and its business mix has improved [5]. - Oppenheimer upgraded Dyne Therapeutics (DYN) from "Hold" to "Outperform," significantly raising the target price from $11 to $40, highlighting the stock's undervaluation compared to its competitor Avidity [5]. Downgrades - HSBC downgraded Biogen (BIIB) from "Hold" to "Reduce," with a slight target price decrease from $144 to $143, citing the poor performance of its multiple sclerosis business [5]. - Jefferies lowered Emerson Electric (EMR) from "Buy" to "Hold," maintaining a target price of $145, indicating limited short-term upside due to the company's recent performance outlook [5]. - JPMorgan downgraded Noble Energy (NE) from "Overweight" to "Neutral," raising the target price from $31 to $33, while expressing caution about upstream capital expenditures [5]. - Jefferies downgraded Rexnord (RRX) from "Buy" to "Hold," reducing the target price from $170 to $160, noting that the company's transformation plan is taking longer than expected [5]. - Jefferies lowered Vail Resorts (VLTO) from "Buy" to "Hold," with a target price decrease from $125 to $105, stating that the current stock price reflects the company's stable demand and strong returns [5]. New Coverage - Guggenheim initiated coverage on Amazon (AMZN) with a "Buy" rating and a target price of $300, suggesting that the retail sector is showing signs of improvement despite previous concerns [9]. - B. Riley initiated coverage on Roblox (RBLX) with a "Buy" rating and a target price of $125, highlighting the company's strong long-term fundamentals [13]. - Cowen initiated coverage on Sensata Technologies (IOT) with an "Outperform" rating and a target price of $55, believing the company's platform aligns well with the $45 trillion "physical operations" industry [13]. - B. Riley initiated coverage on Take-Two (TTWO) with a "Buy" rating and a target price of $300, driven by the anticipated release of Grand Theft Auto 6 in November 2026 [13]. - Canadian Imperial Bank of Commerce initiated coverage on Shark Ninja (SN) with a "Buy" rating and a target price of $135, viewing the company as a "category disruptor" [13].