Brean Capital has initiated coverage on branded apparel and footwear stocks. In a new report, analyst Eric Tracy discussed what Brean sees ahead for the industry and which stocks the firm thinks investors should be buying now.

Valuations Stretched

Tracy acknowledged that multiple expansion has stretched the valuations of many names in the space in recent years, but still sees plenty of opportunity for choosy buyers.

“We recommend that investors focus on names with attractive risk/reward and sound fundamentals, driven by visible top-line growth (share gainers domestically, realistic global expansion), accretive margin levers (pricing power, supply chain, mix shifts to higher-margin DTC/International) and productive capital allocation (balance funding growth with returns to shareholders in buyback/dividend).”

Growth Themes

Brean sees…

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