Who says back-to-school shopping is only for kids and college-bound adolescents?
According to Citi Research analyst Kate McShane, athletic footwear and apparel companies are generally in the best shape this b-t-s season.
Several brands and retailers are expected to partake of revenues from the second-biggest spending event of the year, and potential investors are keeping their eyes peeled for the biggest publicly traded beneficiaries.
But what else is new?
“While athletic has been strong for close to eight years, we think [certain] companies can still capitalize on increased casualization and ongoing innovation,” McShane explained. “Further, this year, versus last year, you can get several stocks at a discount.”
And that news is music to investors’ ears.
Here, FN rounds up three stocks that McShane and other analysts are giving the thumbs-up this b-t-s season.
Receiving buy, positive and outperform ratings almost across the board, these shares are a definite favorite among market watchers. And the biggest perk this back-to-school season? They’re trading at a discount compared the previous year.
“[UA is] a stellar brand that will not be compromised by management and an exceptional growth algorithm (25 percent) for a business that is a long way from maturity,” Susquehanna Financial Group LLLP analyst Samuel Poser wrote of the stock on Aug. 11. “Internationally, opportunities remain robust even following 10 consecutive quarters of 50 percent growth.”
In the footwear realm, bolstered by an endorsement from NBA superstar Stephen Curry, the brand is climbing significantly in importance and is listed among the must-have shoes for many kids this b-t-s season.
Even as the relevance of other athletic brands grows, experts agree that it will be a while before Nike is dethroned from its No. 1 spot. Consistently the most-desired sneaker brand every back-to-school period for the past few years, market-watchers had been quick to hand out favorable ratings for this stock.
But Nike’s stellar performance over the years hasn’t made it the most affordable stock as top-notch quarterly performances tend to yield premium prices.
However, there’s good news for investors this year: The stock is selling at a discount compared with last year, McShane notes.
Foot Locker Inc.
With athletic footwear and apparel topping most back-to-schoolers’ lists this year, it’s no surprise that the top athletic specialty retailer is a top stock pick right now.
“Although we have seen a significant move in Foot Locker since late June, and a strong quarter on Aug. 19, we think there is still room for upside in the stock as the company benefits from an ongoing strong sneaker culture, as well as being a still relevant brick-and-mortar destination (traffic is consistently positive),” McShane wrote on Monday, ranking the firm as the best positioned companies going into the b-t-s selling period.