US Softlines Retail_2025 Preview_ We're Bullish_ Big Potential Reward Makes Risks Worth Taking

Based on the provided document, here's an analysis of the UBS research report on US Softlines Retail: Sector Thesis: * Outperforming Sector: UBS believes the Softlines sector will outperform in 2025, driven by two main catalysts: * Accelerating Softgood Spending Growth: UBS expects apparel spending to accelerate due to factors like GDP growth, improving consumer financial health, and potential tax cuts and deregulation. * Increased M&A Activity: UBS sees a potential increase in M&A activity in the Softlines space, which could create a "take-out" premium for many stocks. Investment Strategy: * Focus on Growth Stocks: UBS recommends investors focus on growth stocks within the Softlines sector, as they have historically outperformed. * Thematic Focus: UBS likes "Up & Comers" in athletic wear like ONON, DECK, SKX, and UAA over the "Big Guys" like NKE, LULU, and VFC. Stock Ratings and Price Targets: * Buy: UBS rates the following stocks Buy due to their strong growth outlooks: * American Eagle Outfitters (AEO) * Abercrombie & Fitch (ANF) * Amer Sports (AS) * Aritzia (ATZ) * Birkenstock (BIRK) * Boot Barn (BOOT) * Burlington (BURL) * Deckers (DECK) * Gildan (GIL) * Hanesbrands (HBI) * Kontoor Brands (KTB) * Levi's (LEVI) * On Holding (ONON) * PVH Corp (PVH) * Ralph Lauren (RL) * Signet Jewelers (SIG) * Skechers (SKX) * TJX (TJX) * Under Armour (UAA) * Wolverine World Wide (WWW) * Sell: UBS rates the following stocks Sell due to their weak growth outlooks: * Dillard's (DDS) * Kohl's (KSS) * Macy's (M) * Columbia (COLM) Key Points: * UBS believes the market is underestimating the potential for growth in the Softlines sector, particularly in the areas of athletic wear and "Up & Comers". * UBS sees a favorable risk/reward profile for many growth stocks within the Softlines sector. * UBS recommends investors closely monitor key economic indicators and M&A activity in the Softlines space. Overall, the UBS research report provides a bullish outlook for the US Softlines retail sector in 2025, with a focus on growth stocks and "Up & Comers" in athletic wear.