Retailers saw increased traffic both online and in-store during the busiest Black Friday shopping weekend ever. BofA Securities analysts weighed in on the retail sector's early holiday winners.
E-commerce: According to Adobe Analytics, online sales during Thanksgiving and Black Friday grew 9% and 10% respectively, from 2023 levels. BofA Securities analysts highlighted an increase in the use of AI shopping assistants, up 31% from last year and sites featuring AI services saw a 9% increase in conversion rates.
The analysts also highlighted a return to strong growth in the e-commerce sector based on early holiday data with retailers like Amazon.com Inc. (NASDAQ: AMZN) and Wayfair Inc. (NASDAQ: W) driving growth with a focus on value and faster delivery speeds. Top categories included makeup and skincare, smart watches and movie merchandise, particularly from the Harry Potter and Wicked franchises.
In-Store: BofA Securities conducted an in-store survey across four states and reported Walmart Inc. (NYSE: WMT), Target Corp. (NYSE: TGT) and Academy Sports and Outdoors Inc. (NYSE: ASO) as the "stand-outs" in terms of in-store traffic.
The firm also highlighted Costco Wholesale Corporation (NASDAQ: COST) and BJ's Wholesale Club Holdings Inc. (NYSE: BJ) as well-positioned to benefit from the consumer's continued focus on value this holiday season.
Specialty Retailers: BofA highlighted Bath & Body Works, Inc. (NYSE: BBWI) as its top holiday pick among specialty retailers and maintained a Buy rating and price target of $45 on the stock. The research firm expects continued growth from the company's third-quarter sales inflection driven by product partnerships and category launches.
BofA Ratings:
- Maintained Target shares with a Buy rating and a $160 price objective.
- Maintained Academy Sports and Outdoor with a Neutral rating and a price target of $63.
- Maintained Walmart stock as a Buy with a $105 price objective.
- Maintained a Buy rating on Amazon shares with a price target of $230.
- Maintained its Buy rating and price target of $962 on Costco stock.