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Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailJPMorgan's Chris Horvers previews retail sector ahead of earningsJPMorgan Retail Analyst Chris Horvers joins 'Squawk Box' with a preview of retail earnings this week, expectations for the sector, and more.
In this videoShare Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWayfair: Why JPMorgan's Christopher Horvers double upgraded the stockChristopher Horvers, JPMorgan senior analyst, joins 'Squawk on the Street' to break down why he double upgraded the stock to overweight from underweight.
JPMorgan said Wayfair shares are cheap right now, and it's time to buy them. Analyst Christopher Horvers double upgraded the stock to overweight from underweight, citing improving market share trends and a better grasp on spending from management. The stock got a boost last week after Wayfair unveiled a cost-reduction plan that includes a 10% workforce reduction. The company has already reported sales trends improving over the fourth quarter, he added. Horvers said it is finally a good time to consider buying Wayfair after the stock burned its Covid "excess" share value.
Don't be surprised if beaten-down retail stock Bed Bath & Beyond falls even more from here, according to KeyBanc Capital Markets. "We do not see Bed Bath & Beyond as a strategic fit for any of the home furnishings retailers in our coverage group, but see interest from retailers in the company's Bed Bath & Beyond store leases, which are ~30,000 sq. ft. and generally in good locations," wrote analyst Cristina Fernández in a Friday note. "Over the past few months, management has stemmed the bleeding, improved liquidity, and improved relations with these two stakeholders," wrote analyst Christopher Horvers. Bed Bath & Beyond shares have experienced a roller-coaster ride in recent years, as smaller traders on Reddit piled into the heavily shorted retailer.
Shoppers walk past a sale sign as Black Friday sales begin at The Outlet Shoppes of the Bluegrass in Simpsonville, Kentucky, November 26, 2021. Jon Cherry | ReutersMajor retailers are under intense pressure to deliver on Black Friday after several of them reported a slowdown in sales heading into the do-or-die holiday shopping season. Best Buy CEO Corie Barry said shoppers are showing more interest in sales than usual. Barry, the Best Buy CEO, said the company's October sales were the slowest in the quarter compared with last year. She said Best Buy now expects customers to spend more during Black Friday, Cyber Monday and the two weeks leading up to Christmas.
Costco and Target should emerge victorious as retailers navigate another tricky macro environment this holiday season, JPMorgan says. While the season will pale in comparison to 2021, Horvers anticipates a solid holiday period based on historical standards. Along with Target and Costco, JPMorgan views names like Ulta Beauty and food-focused companies including Walmart and BJ's Wholesale as other holiday-season winners. Auto parts dealers also make a solid defensive trade, Horvers wrote. Among the biggest losers this season, JPMorgan sees headwinds ahead for names like Best Buy , Bed Bath & Beyond and Wayfair .
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