MKM Partners Pinpoints 4 Potential Winners Within The Clothing Retail Industry

Let’s now turn our attention to Gap Inc (NYSE:GPS), another ‘Buy’-rated clothing retailer, in which MKM Partners initiated coverage this morning with a price target of $40. Roxanne Meyer indicated that the increasing demand for the Old Navy brand is likely to offset the weakness of the company’s Gap and Banana Republic brands. Moreover, Old Navy is set to benefit from its strong management team and its speedy supply chain. However, Gap’s stock performance has been disappointing throughout 2015, as its shares have lost over 23% since the beginning of the year. The company’s August sales decreased by 3% year-over-year to $1.20 billion, which suggests that the company has been struggling to lure customers to its stores. Edward Lampert’s ESL Investment added a 2.06 million-share position in Gap Inc (NYSE:GPS) to its portfolio during the latest quarter.

Last but not least, TJX Companies Inc (NYSE:TJX) was upgraded to ‘Buy’ from ‘Neutral’ by MKM Partners and received a price target of $83. Therefore, Roxanne Meyer and her team assign a potential upside of over 13% for the stock. It is worth noting that TJX is among Goldman Sachs Group Inc. (NYSE:GS)’s highest quality stocks as well, which have strong balance sheets, high returns on capital, low volatility, strong margins, high dividend yields, and stable growth in sales and earnings. The stock’s share price has been quite stable this year, returning slightly over 3% since the start of 2015. Gabriel Plotkin’s Melvin Capital Management purchased a new stake in TJX Companies Inc (NYSE:TJX) during the second quarter consisting of 1.3 million shares.

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