BMO cautious on softlines, bearish on athletic names
BMO Capital Markets initiated coverage of the softlines sector with a cautious outlook, citing a weakening consumer and rising costs. The firm is bearish on athletic names, including Nike (target $30), Deckers ($70), Dick's Sporting Goods ($110), and lululemon ($70), all with earnings below consensus. BMO is more constructive on companies with self-help stories, rating Abercrombie & Fitch, Amer Sports, Carter's, and Steve Madden as Outperform.
How this was made
The 30-second read
Why it matters
The analyst's stance could shift short‑term price dynamics for the listed names, especially the underweight athletic brands.
Market read
Provides fresh analyst ratings that may influence trading decisions in the retail apparel space.
What to watch
Potential upside from cost‑saving initiatives and brand turnarounds not fully priced in.
Background
BMO Capital Markets launched a new coverage note on the softlines sector, issuing ratings and price targets for multiple retailers.
Ticker impact
BMO placed Nike underweight with a $30 price target, indicating a negative outlook.
moderate decline
Analyst downgrade and low target suggest weaker demand.
BMO set an Underperform rating on Deckers with a $70 target.
moderate decline
Underperform rating signals concerns about the athletic segment.
BMO gave Dick's Sporting Goods an Underperform rating and $110 target.
moderate decline
Analyst view reflects soft consumer demand.
BMO rated Lululemon Underperform with a $70 target.
moderate decline
Negative outlook for athletic apparel.
BMO initiated Abercrombie & Fitch at Outperform.
moderate upside
Outperform rating suggests turnaround potential.
BMO initiated Amer Sports at Outperform.
moderate upside
Outperform rating indicates growth expectations.
BMO initiated Steve Madden at Outperform.
moderate upside
Outperform rating reflects growth prospects.
BMO started American Eagle at Market Perform.
limited movement
Market Perform indicates no strong catalyst.
Market effects
Softlines retail sector faces cautious outlook, especially athletic apparel.
U.S. consumer discretionary stocks may see mixed reactions.
Limited to U.S. retail equities; no broader macro impact.
Counterpoint
Some investors may see the athletic sector undervalued despite BMO's negativity.
Key entities
- AnalystBMO Capital Markets
Issuer of the coverage note.
