‘Harmonizing tailwinds’ sets Home Depot, Best Buy, and Wayfair as J.P. Morgan’s top picks
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Weighing the crosscurrents in the present consumer environment – including rate cuts, tariffs, employment growth, accelerating wealth-effect, and tax stimulus from the One Big Beautiful Bill – J.P. Morgan analyst Christopher Horvers isolates certain names within the retail sector that can outperform in a volatile, and sometimes treacherous investment environment.
Quick Insights
Solid wage growth, rising replacement cycles, and incremental net inflation benefits are seen as key catalysts, especially in the context of positive consumer crosscurrents and potential harmonization of positive factors.
Home Depot is highlighted for its growth initiatives, culture, and store innovation, while Wayfair is expected to outgrow the category due to the long-term shift to online retailing and boasts supply chain and technology advantages.
Wayfair faces potential cost pressures but is likely to maintain demand due to expense controls and supply chain advantages; Home Depot has limited exposure due to domestic sourcing and a diversified supply chain.
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