07:43 Merrill Lynch downgrades retail stocks
Merrill Lynch says that while Q1 earnings are expected to be the strongest in years, they believe that the following concerns could pressure retail stocks 2H04: 1) rising interest rates are widely anticipated after the election, 2) removal of apparel quotas at many countries, notably China on Jan 1, 2005, 3) tough comparisons with a strong Christmas season last year for most retailers, 4) decelerating corporate profit cycle, and 5) the fact that retail stocks tend to seasonally underperform in the second half of the year. Firm downgrades DDS to Sell from Neutral, and downgrades WMT, ARO, ZLC, FDO, DLTR, TGT, ANN, and NMGA to Neutral from Buy. |
