Deutsche Bank: Christmas Is Going To Be Surprisingly Awesome


The economy is in recovery mode and spending is on the rise.

Deutsche Bank analyst Bill Dreher Jr believes that spending this holiday season will surprise on the upside, based on a return of credit availability to pre-crisis levels:

California is improving, and Christmas sales could surprise to the upside. Our Broadline index for Oct is +1.6% vs. -2.8% in Oct. LY. Sales are beginning to improve, particularly in hard-hit areas like CA. More discretionary retailers are now cycling much easier y/y comparisons. Christmas sales will be positive and surprise to the upside, particularly given $21B in up-for-grabs market share. Better sales and tighter expense & inventory mgmt should drive more discretionary retailers to beat raised 3Q and 4Q EPS guidance. Against this backdrop, we like CVS, JCP, SKS, TGT and KSS.

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