March 25, 2020, 8:54 a.m. EDT

Goldman upgrades Ross Stores, downgrades Under Armour after coronavirus disrupts retail

Goldman Sachs has changed stock ratings on a number of brands and retailers as the coronavirus pandemic disrupts brick-and-mortar retail, impacting revenue, putting pressure on margins and putting stress on cash flow and liquidity. Goldman upgraded Ross Stores Inc. (NAS:ROST) to buy from sell, but lowered its price target to $93 from $110. "Off-price is particularly well positioned to weather headwinds," analysts wrote. "[O]ur analysis suggests Ross Stores will continue to have sufficient cash on hand to operate into the second half even if revenue losses during the March 15-to-June 30 time period approach 90%." Analysts downgraded Under Armour Inc. (NYS:UA) (NYS:UAA) to neutral from buy, and cut their price target cut to $9 from $21. Analysts say that 2020 was intended to be a "reset year" after losing "brand momentum," and their prior view was based on marketing investment to turn that around. In the current environment, Goldman is expecting Under Armour to struggle to fund that investment. And its efforts to sell at full price will be "at risk" if sales disruption continues. Weak brand momentum is also a problem for Kontoor Brands Inc. (NYS:KTB) , the parent company to denim brands Wrangler and Lee. Goldman downgraded Kontoor to sell from neutral and reduced its price target to $17 from $32. Ross Stores stock was up 0.2% in Wednesday premarket trading but down 57.6% for 2020 so far. Under Armour shares rose 1.6% in premarket, but are down 56.2% over the last year. And Kontoor stock slumped 7.4% in premarket, and is down 38.4% for the year to date. The S&P 500 index (S&P:SPX) has fallen 24.3% for 2020 to date.

Link to MarketWatch's Slice.