Major department stores receive rating reprieve
December 20, 2001,
New York — Expecting a first-quarter rally in retail stocks will follow a weak holiday season, Merrill Lynch analyst Daniel Barry has raised his rating on three major department store players, J.C. Penney, Fedederated and May Department Stores.
Barry said he expects retail profits will begin to improve early next year, setting the stage for even greater growth later in 2002 as the overall economy gains strength.
"Fundamentally, the earnings estimate erosion underway since Sept. 11 should end in early January, when retail stocks should fully discount the poor Christmas shopping season," Barry said in a research note.
Retail stocks have already staged a recovery from the lows they touched after the September 11 terrorist attacks, but still remain beneath their highs for the year.