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In a wide-ranging note to investors Thursday, analysts at KeyBanc Capital Markets said they are maintaining a cautious view on the global brands and e-commerce sector amid an inflationary environment and general macro uncertainty.
However, they believe several differentiating factors are allowing select companies to better navigate the current environment and position themselves for long-term success.
One of the analysts named Farfetch (NYSE:FTCH), Nordstrom (NYSE:JWN), Lulu’s Fashion Lounge (NASDAQ:LVLU) and Revolve Group (NYSE:RVLV) as “stock ideas.”
“While we believe risk to the middle and upper-income consumer has grown, we continue to see the high-end consumer remaining somewhat resilient in this environment and with valuations at multi-year lows in many cases, we see select buying opportunities, particularly with respect to retailers serving the high-end consumer well,” he said.
“We believe a curated and experiential physical presence is a competitive differentiator key to long-term success in a competitive retail environment. Near term, we think retailers with both a physical and digital presence will benefit from pent-up demand for in-person shopping relative to digital-only retailers; retailers with exposure to dresses and occasion wear are also better positioned given a more robust event calendar this year,” he added.
