Vlad Schepkov
2 min read
Investing.com — TD Cowen has identified its top picks in the hardlines specialty retail sector as October Consumer Price Index data shows renewed inflation pressures across multiple categories. The firm maintains buy ratings on three retailers positioned to navigate the current pricing environment in auto aftermarket, home improvement, and furniture segments.
Food-at-home inflation re-accelerated in October, rising 0.4% month-over-month after three subdued months. Key components including beef, chicken, dairy, and snacks showed month-over-month price increases. Auto aftermarket categories, home improvement products, and furniture also generally accelerated on a monthly basis during the period.
1. O’Reilly Automotive (ORLY)
TD Cowen rates the auto parts retailer as a buy with a price target of $110, compared to the current price of $89.90. The firm’s analysis shows motor vehicle parts and equipment rose 0.2% month-over-month in October, while motor oil, coolant, and fluids increased 0.3% month-over-month. Motor vehicle maintenance and repair services climbed 0.6% month-over-month, and motor vehicle insurance rose 0.7% month-over-month during the period.
2. Home Depot (HD)
The home improvement retailer receives a buy rating with a $410 price target versus its current $351.75 price. October data showed tools, hardware, outdoor equipment and supplies increased 0.1% month-over-month, while the floor coverings index rose 0.4% month-over-month, reversing from a 0.6% decline in September.
3. Williams-Sonoma (WSM)
TD Cowen assigns a buy rating with a $300 price target on the home furnishings retailer, which currently trades at $259.95. The furniture and bedding category showed significant acceleration, rising 1.2% month-over-month in October after declining 0.8% in September and 0.9% in August.
Original Article
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