Business Corpus: Macy's, Kohl's, J.C. Penney, Sears Lead Big-Box Retail Slide As Analyst Sees 'Limited Upside'Department store stocks like Macy's and J.C. Penney sank after a Deutsche Bank analyst warned of "limited upside" in the space despite a sales bump from the holidays late last year. The post Macy's, Kohl's, J.C. Penney, Sears Lead Big-Box Retail Slide As Analyst Sees 'Limited Upside' appeared first on Investor's Business Daily.

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Department store stocks like Macy's (M) and JCPenney (JCP) sank after a Deutsche Bank analyst warned of "limited upside" in the space despite a sales bump from the holidays late last year.

The analyst, Paul Trussell, in a report on Monday, said the valuation of those and other deapartmen has gotten "ahead of itself." Since early December, he said, shares of the department stores he covers had charged roughly 24% higher — excluding JCPenney — compared to a roughly 1% gain for the S&P 500.

And he said that first-quarter same-store sales might have been weak due to bad weather in March and April and an earlier Easter holiday. Macy's and several other retailers report earnings next week.

JCPenney slid 3.1% in the stock market today. Macy's stock sank 3.9%, undercutting a recent buy point, but finding support at its 50-day line.

Dillard's (DDS) and Kohl's (KSS) sank about 4.5%. Kohl's stock hit resistance at its 50-day line while Dillard's is at its lowest levels since late February.

Nordstrom (JWN) sank 1.9%, falling below its 50-day as it forms the handle of a cup base. Trussell said that Nordstrom "could surprise to the upside as its business is more insulated from weather patterns."

Sears Stock, Other Big Discounters Fall Too

As for big-box discounters, Walmart (WMT) fell 2.5% and Target (TGT) 2.6%. Sears Holdings (SHLD) tumbled 8.8%. Walmart and Target are hitting resistance at the 50-day line. Sears is still above that support area, but the stock is in an 11-year downtrend.

The assessment comes as department stores continue to struggle to compete vs. online retailer Amazon (AMZN) and off-price chains.

'Favorable View' Of Ross Stores

Trussell continues to have "favorable view" of off-price apparel chains Burlington Stores (BURL) and Ross Stores (ROST). And he said he preferred global brands — like PVH Corp. (PVH) and Nike (NKE) — citing "recent moves to right-size inventory, spur innovation, and increase (direct-to-consumer) penetration, plus FX tailwinds."

He also remained upbeat on consumer sentiment, despite the murky post-holiday landscape.

"After a strong Holiday, industry data points are mixed suggesting that momentum may have not continued in 1Q18," he said, "however, the consumer appears to be in good shape with consumer confidence reaching its highest point in March 2018 since January 2004."

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The post Macy's, Kohl's, J.C. Penney, Sears Lead Big-Box Retail Slide As Analyst Sees 'Limited Upside' appeared first on Investor's Business Daily.