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Apparel Stocks: The Latest Action on Wall Street

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Recent analyst actions in the apparel sector

September has been full of analyst action on apparel stocks. Barclays and Bernstein initiated coverage on the industry while other brokers changed their outlooks on the stocks in this space.

Barclays started with a neutral view on the apparel industry, giving an “Outperform” rating to Hanesbrands (HBI) and Gap (GPS), an “Equal-weight” rating to Coach (COH), and an “Underweight” rating to Ralph Lauren (RL).

Bernstein chose to assign an “Outperform” rating on Coach (COH) and Nike (NKE), a “Market Perform” rating on Lululemon Athletica (LULU), PVH (PVH), and VF Corp. (VFC), and an “Underperform” rating on Under Armour (UAA).

This series discusses the latest analyst action on apparel and accessory companies in September. The current series covers Nike, Under Armour, Lululemon Athletica, VF Corp., PVH Corp., Hanesbrands, Ralph Lauren, and Coach.

As you can see from the chart below, among the companies mentioned above, PVH Corp. has received the best rating (1.9) while Under Armour has received the lowest rating (3.1).

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The US apparel and fashion industry

The US apparel industry is the largest in the world. According to CNBC, the US apparel market had a total value of $200 billion in 2016—up 3% from the previous year. With trailing-12-month revenues of $34.3 billion, Nike (NKE) is the world’s largest apparel company.

Stock market performance this year

The sector has delivered mixed performance in the stock market this year. While branded apparel and accessory companies like PVH Corp (+40%) and Coach (13.3%) are riding high on their turnaround stories, sportswear player Under Armour (-43%) continues to struggle on its shrinking market share.

Overall, the S&P 500 Apparel and Accessories index (+7%) has underperformed the S&P 500 index (+11.5%) so far this year.

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