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Morgan Stanley analysts revisited the entire Hardline, Broadline, and Food retail category with two upgrades and four downgrades.The Retail Analyst: Simeon Gutman upgraded:Sally Beauty Holdings, Inc. (NYSE: SBH) from Underweight to Equal-Weight, price target lifted from $9 to $13. Williams-Sonoma, Inc. (NYSE: WSM) from Underweight to Equal-Weight, price target lifted from $95 to $130.The Sally Beauty Thesis: Sally Beauty operates in a defensive business category that should see growth in 2021, Gutman wrote in the note. The stock also notably underperformed the retail sector in 2020 as it fell 30% versus a 33% market-cap-weighted gain for the retail group.Investors are likely to look at Sally Beauty as both a “reopening winner” and “value” stock amid an improving economic environment.The Williams-Sonoma Thesis: The case against a bearish stance on Williams-Sonoma’s stock is based on: 1) expectations for the home furnishing category to grow at a “healthy” rate in 2021 and beyond, and 2) the Street’s models for Williams-Sonoma’s 2021 performance are “not overly demanding.”The company could show stronger-than-expected revenue growth in the near term and generate 10% EBIT margins over the next few years versus 8% to 9% in 2017 to 2019 and 13.5% in 2020.Gutman downgraded:Michaels Companies Inc (NASDAQ: MIK) from Equal-Weight to Underweight, unchanged $13 price target. Ollie’s Bargain Outlet Holdings Inc (NASDAQ: OLLI) from Equal-Weight to Underweight, price target lowered from $86 to $80. Kroger Co (NYSE: KR) from Equal-Weight to Underweight, price target lowered from $32 to $28. Albertsons Companies Inc (NYSE: ACI) from Equal-Weight to Underweight, price target lowered from $16 to $13.The Michaels Companies Thesis: Shares of crafts retailer Michaels are up 35% since Morgan Stanley last upgraded the stock in December 2020. The strong outperformance versus the S&P 500’s 3% gain over the same period factors in greater upside to earnings expectations in the near-term and medium-term.In addition, Michaels’ may have positioned itself to benefit from stay-at-home trends during the COVID-19 pandemic, the analyst wrote. But its long-term outlook not materially improved while its stock is trading near its three-year and five-year historical averages versus most peer retailers that are trading at a discount.Related Link: Benzinga’s Top Ratings Upgrades, Downgrades For January 20, 2021The Ollie’s Bargain Thesis: Ollie’s stock entered 2021 just 12% removed from its all-time highs but the discount retailer will face difficult year-over-year comparisons throughout 2021, Gutman wrote.The company benefited throughout 2020 by default of being one of the few largely non-essential retailers that stayed open during the pandemic and this catalyst will not persist in 2021.The Kroger And Albertsons Thesis: The case against Kroger and Albertsons is based on expectations for industry-wide grocery sales to decline in 2021 and experience “tepid” growth in 2022, Gutman wrote.Both Kroger and Albertsons saw their market share gains narrow through 2020 and this implies the initial surge in demand from the pandemic is not sustainable, the analyst wrote. In fact, both companies will revert back to pre-COVID pandemic margins by 2022 (Photo: Williams-Sonoma)See more from Benzinga * Click here for options trades from Benzinga * Why Should We Care About Joe Biden’s White House Peloton? * Rastegar Property Launches New 0M Offering Across Sun Belt(C) 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Artisan Global Discovery Fund, a global investment management firm, published its third-quarter 2020 Investor Letter – a copy of which can be downloaded here. A positive return of 11.79% was recorded by the fund for the 3rd Quarter of 2020, ahead of its MSCI All Country World benchmark that returned 8.13%. You can view the fund’s […]

Discount retail chain Ollie’s Bargain Outlet Holdings Inc. (NASDAQ: OLLI) has a sourcing problem, as the supply of the closeout merchandise Ollie’s typically acquires is lower than expected, according to BofA.The Ollie’s Analyst: Jason Haas downgraded Ollie’s from Buy to Underperform with a price target lowered from $105 to $82.The Ollie’s Thesis: Ollie’s typically acquires merchandise in bulk when other retailers are forced to close their doors and liquidate their inventory.Yet expectations for a “meaningful” second wave of retail closures in the first quarter of 2021 are unlikely to play out, Haas said in a Thursday downgrade note. On a square foot basis, store closures in Ollie’s categories — excluding apparel — were higher by 91% year-over-year in the first three quarters of 2020, but were down 91% year-over-year in the fourth quarter, the analyst said. Related Link: Recap: Ollie’s Bargain Outlet Q3 Earnings”We have historically seen a roughly nine-month lag between store closures and the impact on same-store sales, implying potential sourcing difficulties through 2021,” he said. In addition, a combination of higher freight costs, a weaker U.S. dollar and higher raw material costs imply that Ollie’s also faces headwinds in importing items from overseas suppliers, Haas said.This is more of a “secondary issue,” as only 20% of merchandise is imported, of which around 80% comes from China, the analyst said. Tax refunds in 2021 could be down 11% year-over-year, as unemployment benefits are a taxable source of income, but not withheld by most people who receive them, he said.Once tax season comes, this could become a “negative surprise” for many Ollie customers, Haas said. OLLI Price Action: Shares of Ollie’s Bargain Outlet Holdings were trading lower by 1.71% at $94.39 at last check.Photo by Dwight Burdette via Wikimedia.Latest Ratings for OLLI DateFirmActionFromTo Jan 2021B of A SecuritiesDowngradesBuyUnderperform Dec 2020Morgan StanleyMaintainsEqual-Weight Nov 2020B of A SecuritiesMaintainsBuy View More Analyst Ratings for OLLI View the Latest Analyst RatingsSee more from Benzinga * Click here for options trades from Benzinga * Taco Bell Is ‘Starting Fresh’ With Beyond Meat Vegan Options In 2021 * Acacia Communications Shares Surge After Deal Reached With Cisco(C) 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

With new leadership and beneficial positioning during the pandemic, the company saw record profits in 2020.

Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Amongst other things…