3 stocks Bank of America trusts thanks to rising demand from young consumers
According to Bank of America's analysis, younger generations of consumers, particularly millennials and Generation Z, should present significant growth opportunities for discount apparel retailers. The analysts note that these customer groups have been significantly increasing their spending on affordable clothing recently, which is a positive indicator for future sales for these companies.
Bank of America therefore recommends investing in the stocks of these three companies, all of which have seen their prices rise over the course of the year.
Burlington Stores $BURL-1.3%
Burlington Stores, formerly known as Burlington Coat Factory, is one of America's leading discount fashion retailers. According to Bank of America, young consumers are increasingly buying affordable clothing, allowing Burlington to increase its market share. This trend is supported by the company's positive financial results, with its stock up approximately 40% since the beginning of the year.
Burlington has benefited from long-term inflation, which has prompted many consumers to seek cheaper alternatives. The challenge for Burlington will be to retain those customers even after their incomes rise and inflation falls. It will be important to continue to offer attractive merchandise at bargain prices in order for the company to retain the loyalty of the younger generation that now makes up a growing portion of its customers.
Ross Stores $ROST+0.1%
Ross Stores, Inc.
ROSTRoss Stores, another leading discount retailer, also sees great potential in the shopping preferences of younger consumers. According to Bank of America analysis, Ross Stores is in a strong position due to its ability to offer customers not only quality merchandise, but also branded products at significantly lower prices than traditional retailers.
In recent years, Ross has been able to expand its offerings and capture the attention of a wider range of customers, particularly among millennials and Generation Z, who are focused on bargain shopping. Bank of America notes that capturing these young consumers early in their careers is key to retaining them in the future as their incomes grow.
TJX $TJX-0.3%
TJX, the company behind popular brands like T.J. Maxx, Marshalls and HomeGoods, has also enjoyed considerable popularity among younger consumers in recent years. TJX is known for offering a wide range of branded clothing, home goods and accessories at discounted prices, which appeals especially to price-sensitive shoppers.
Bank of America's analysis highlights that TJX has a long growth trajectory due to its ability to adapt to changing consumer preferences. The increasing interest in value shopping among millennials and Generation Z provides the company with an opportunity to strengthen its position in the market. Additionally, even as inflation recedes, TJX has the potential to maintain customer loyalty in the years to come thanks to its broad offerings and great prices.
Disclaimer: You will find a lot of inspiration on Bulios, but stock selection and portfolio construction is up to you, so always do a thorough analysis of your own.
Source: Yahoo, CNN, 247wallst.com.