Consumer Spec - Pre Market Wrap
JPMorgan S&P 8,000 | Footwear Rotation: ONON Winner, NKE Share Donor | DKS Upgrade | Furniture Inflects, HI Stuck: HD/RH/WSM PTs Raised | QSR Softens, DPZ Cut | FIVE, BOOT | CELH Cut
No earnings today and quiet day by looking at EU Consumer sectors (flattish) and morning gappers list.
In terms of research, JPMorgan lifts S&P 500 target to 8,000 on AI monetization, though staples stay unloved. Athletic footwear rotation sharpens — Morgan Stanley's intern survey crowns ONON standout winner while NKE bleeds the most share; painful, but the Nike turnaround remains a 2027 story. Wells Fargo upgrades DKS to OW at $240 on Foot Locker's margin recovery. QSR softens on weaker chicken, Loop cuts DPZ to Hold. Furniture inflects while home improvement stays stuck — TD Cowen raises HD, RH, WSM. Discount resilience holds: Mizuho pushes FIVE to $260, Stephens loves BOOT; CELH cut on the miss.
MACRO & MARKETS
SPX: BTIG FLAGS DIVERGENT BREAKOUT, SEES LIMITED UPSIDE IN RSP
The firm draws an analog to late 2021, when the SPX broke out of a multi-month range with a 6% rally to a 52-week high while high-beta momentum was already in a 25% drawdown, similar to today’s setup, and thinks the current breakout is likely to falter. 6-month long/short momentum now sports a declining 200 DMA as software (prior losers) has ripped while semis (prior winners) have suffered, with the momentum SHORT index up 50% over the last six months, raising the question of whether this is the new momentum LONG or simply the last leg of a short-cover/unwind.
A few charts to highlight from the report:
STRONG OVERALL CONSUMER PICTURE FROM BOFA CHARTS:
July’s job growth shows further acceleration…
….led by lower-income households
& after-tax wage growth developments mirror the lower-income jobs story…
INTERESTING CHART FROM JPM
Consumer sentiment and stock returns….Interesting chart below over the past 55 years showing the average subsequent 12-month S&P 500 returns at consumer sentiment peaks (+4.8%) vs. consumer sentiment troughs (+24.1%).
MARKET: JPMORGAN RAISES S&P 500 TARGET TO 8,000 FROM 7,800 ON STRONG EARNINGS, AI MONETIZATION
JPMorgan raised its 2026 S&P 500 price target to 8,000 from 7,800, driven by a strong and broad-based Q2 earnings season and improving evidence of AI monetization. The firm lifted 2026 EPS to $365 (up 35% Y/Y, above $358 consensus) and 2027 EPS to $420 (up 15%), while keeping the forward multiple unchanged at roughly 20x on higher-for-longer rates, geopolitical uncertainty and heavy equity and debt supply. The firm notes private-company stake valuations are boosting EPS by roughly $18 based on 1H26 marks; ex that contribution, normalized 2026 EPS would be $347 (up 28% Y/Y). Hyperscaler capex remains the season’s key theme, with consensus projecting roughly $900B by year-end (up 85% Y/Y) and topping $1.2T by end-2027.
QSR: JEFFERIES SAYS JULY TRAFFIC SOFTENED ON WEAKER CHICKEN, PIZZA PER PLACER DATA
Jefferies notes QSR traffic softened slightly in July per Placer data, giving back part of June’s improvement on weaker chicken and pizza performance. Industry SSS reached 1.7% (roughly 10bps below June) as traffic slipped roughly 20bps offset by check firming roughly 10bps, with full-month traffic down 2.1% vs. down 1.8% through the first half. The firm attributed the moderation to possible weather disruptions from Canadian wildfire smoke and Cyclospora foodborne illness concerns late in the period. Within QSR segments, burger traffic firmed 46bps, chicken gave back 60bps and pizza declined 79bps; the firm also notes LW characterized U.S. restaurant traffic as roughly flat in its Q4 with QSR chicken up 3% and QSR burger down 4%.
CONSUMER STREET RESEARCH
Upgrades
Dick’s Sporting (DKS) Raised to Overweight at Wells Fargo; PT $240
Downgrades
Domino’s Pizza (DPZ) Cut to Hold at Loop Capital; PT $353
Initiations
No initiations in consumer sector today
EARNINGS REPORTS
No consumer earnings reports today
ANALYST RESEARCH & NEWS
DKS: WELLS FARGO UPGRADES TO OW, PT TO $240
The firm upgrades DKS to Overweight and takes PT to 240 on 14 to 15x 2027 P/E, arguing the developing multi-year story outweighs squishy near-term trends and that buyers are rewarded at current levels. Three pillars support the call: multi-year margin recovery at Foot Locker (a return to 7 to 8% from 1 to 2% on better allocation and merchandising), execution at core DSG in the early innings of a high-ROI flywheel, and DKS as the cleanest way to play an eventual Nike turnaround, with checks pointing to bullish early reads on Spring 2027 NA product; the analyst sees potential FY28 EPS power at 20.00+ vs Street 18.69. On DSG, the firm models +MSD sales on +LSD underlying comp (ex-relocations and GameChanger), House of Sport and Field House remodels earning ~30% and ~40% 4-wall ROIC and adding +200 to 275bps to comp, with GameChanger, paid loyalty and DICK’S Media Network an under-appreciated flywheel. 2Q should be soft, driven almost entirely by FL (comps modeled -3.5% vs Street +0.4%) for EPS of 3.72 vs Street 3.77, but the analyst frames B2S trends, FL inflection timing and 2H profit levers as more critical to the story than the print.
VSXY: MORGAN STANLEY SURVEY STRENGTHENS OW CONVICTION
The firm’s proprietary ~1,000-person intimates survey leaves estimates unchanged but explicitly raises confidence in the three pillars of the OW: continued sales momentum, margin expansion and turnaround durability. The bull case rests on younger consumers, with women 16 to 34 planning to spend more on intimates than any other cohort (+29% net NTM intentions) and ranking VS their #1 preferred destination, signaling mindshare capture with a new customer base. Two structural gaps, comfort positioning (VS #8 vs industry #4) and value perception (a ~35-pt gap, the widest of all attributes surveyed), are framed as untapped levers rather than fatal flaws, with management already running initiatives on both.
WMT: MIZUHO POSITIVE ON COLLECTIBLES MARKETPLACE EXPANSION AT SPORTS CONVENTION
Mizuho attended the 46th National Sports Collectors Convention near Chicago, where Walmart showcased an expanded presence for its trading cards and memorabilia marketplace. The firm notes attendance rose roughly 20% Y/Y with WMT’s booth larger and busier vs. last year, while the invite-only seller platform has seen recent transactions exceed $30,000 for signed memorabilia (with WMT taking commission). The firm adds WMT is offering seller incentives including 4.8% commission fees, $2,000 in fulfillment credits and $1,000 in SEM credits, and partnered with GradedGuard on branded PSA slabs reselling above $100. Mizuho pegs the U.S. trading card market at $10B to $20B and maintains a $130 PT on WMT applying 36x FY28 EPS.
Potentially negative for EBAY
NKE / ONON: MORGAN STANLEY INTERN SURVEY CALLS ON RUNNING “STANDOUT FOOTWEAR WINNER,” NKE BIGGEST SHARE DONOR
Morgan Stanley’s 8th annual AlphaWise intern survey identifies On Holding as the standout winner in an increasingly fragmented athletic footwear category. The firm notes ONON delivered the largest Y/Y share gain and rose to #2 in the preference ranking (preference up roughly 5pts to 13%), while NKE saw the largest Y/Y share decline, dropping to a survey low. The analyst adds brand preferences are diverging widely, with the top two brands boasting double-digit preference ranks vs. low-single-digit for the bottom three. The firm frames the dynamic as “NKE’s loss is ONON’s gain” in the athletic footwear space.
US HOME IMPROVEMENT & FURNITURE (TD COWEN): FURNITURE INFLECTING, HI STUCK, PTS RAISED ON HD/RH/WSM
The firm previews the group with furniture (especially high-end) inflecting stronger than other big-ticket categories while HI trends stay stuck; PTs go to HD 410 (from 375), RH 220 (from 185) and WSM 280 (from 225).
HD (top pick, #2 idea): modestly positive setup with the firm modeling comps +0.9% (vs LOW -0.2%), Pro outperforming DIY, solid EPS hitting bogeys and a reiterated FY guide, though the analyst sees a muted reaction given ~10pts of YTD outperformance vs LOW and only a modest 2H inflection.
LOW: the firm expects a 2Q comp miss and cuts its estimate to -0.2%, but views it as well understood; near-term setup is more interesting at 16.5x P/E, where shares could work on better-than-feared or a 2H cut and close the valuation gap to HD.
WSM: toughest setup on a +41% YTD run, yet the analyst models comps +4.9% vs Street 3.7% (buy-side bogeys 4.5 to 5%), expects a comps-driven EPS beat and a raised low-end comp guide, sees gross margin beating pre-tariff-benefit with a favorable 3Q as tariffs lap, and would add on weakness given a ~4% FCF yield.
RH: widest risk-reward and most compelling 2H setup with solid, on-pace Estates checks; the firm models 2Q within guide and is focused on Estates demand commentary as the key to lofty 2H targets, growing more constructive on the medium-term.
UAA: BOFA REITERATES NEUTRAL, RAISES PO TO $6.80
The firm reiterates Neutral and lifts PO to 6.80 from 6.40 (11x F28E EV/EBITDA) as deeper cost cuts protect earnings even after UAA cut F27 sales guidance to down MSD from down slightly, while holding OI of 140 to 160mn and EPS of 0.08 to 0.12; the analyst keeps F27E EPS at 0.10 and nudges F28E to 0.18. Product is improving gradually but isolated wins have not created the brand heat needed for volume, with NA sales -9% in 1Q (ecommerce -12%, footwear -8%) as traffic weakened from late May, NA now guided -MSD% vs -LSD% prior and EMEA and APAC flipping from growth to declines.
FIVE: MIZUHO RAISES PT TO $260, EXPERT CALL TAKEAWAYS
The firm raises PT to 260 and lifts estimates into Q2 after shares blew through its prior target, with an expert call (former SVP of Store Operations) firming conviction on the setup: a pressured lower-income consumer, a steadily improving assortment and influencer-first marketing amplifying value. On credit-card and foot-traffic data plus in-store checks, the analyst takes Q2 comps to +11 to 12% from +10% (vs guidance +7 to 9%), including ~100bps from a mid-May ‘Golden Dumpling’ event, pushing EPS to 1.48 vs consensus 1.33 and guidance 1.17 to 1.29, with 2H upside nudging annual numbers higher. Expert takeaways: new movie IP is an unexpected lift with more licensed product into holiday, party and balloons square footage is expanding as pet and greeting cards flex down, and comps rarely see a “cliff” after sustained momentum, implying an FY27E +MSD% comp framework the analyst calls the most bullish case and a potential path to ~300 on the shares.
AN: STEPHENS RAISES PT TO 232 FROM 220, MAINTAINS EQUAL WEIGHT AFTER Q2 BEAT
Stephens raised its AutoNation price target to 232 from $220 while maintaining Equal Weight. The firm notes 2Q26 adj. EPS of $5.56 (up 1.7% Y/Y) beat Stephens/Street of $5.51/$5.47, marking the sixth consecutive quarter of positive Y/Y EPS growth. The analyst adds AN’s total customer value playbook, expense management, scale and share repurchases drove EPS growth despite tough dealership KPIs (new unit SSS down 4.7%, used SSS down 8%, S&P GP s flat). Stephens estimates AN grows EPS DD% over each of the next six quarters even though EBITDA growth remains primarily in the LSD% range.
BOOT: STEPHENS RAISES PT TO 207 FROM 196, REITERATES OVERWEIGHT AFTER Q1 TOPS EVERY LINE
Stephens raised its Boot Barn price target to $207 from $196 while maintaining Overweight. The firm says F1Q27 topped expectations on every line, with adj. EPS ex-tariff-refund of $1.91 well above Stephens/Street of $1.68/$1.70. At $163.60, BOOT trades at 11.1x TTM EBITDA and 8.8x NTM EBITDA, with the firm’s FY27/FY28 EBITDA growth estimates at roughly 23% and 10%. The analyst adds that in a consumer tape trading “heavy” for the last 6 to 8 weeks, BOOT offers “a high quality growth company at a low valuation” with meaningful snapback if the current weakness proves a head fake.
CELH: STEPHENS CUTS PT TO 50 FROM 65, MAINTAINS OVERWEIGHT AFTER Q2 MISS
Stephens lowered its Celsius Holdings price target to $50 from $65 while maintaining Overweight (Vol.). The firm notes 2Q26 came in below expectations across sales, adj. EBITDA and adj. EPS, with brand CELSIUS down roughly 12% Y/Y (including a 7ppt headwind from DSD inventory rebalancing). The wide gap between scanner trends and reported results, paired with commentary that 3Q brand CELSIUS trends look similar, sent shares sharply lower before Friday’s rebound on CNBC reports that Rockstar’s founder took a 4.7% stake. The analyst adds the energy drink category thesis remains intact and reset numbers leave a compelling growth profile at an approachable valuation.
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EARNINGS CALENDAR
