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When it comes to the world of softline retail and global brands, many disruptions have been seen in recent years. It’s not just the death star of Amazon either. Many consumers have turned to discount stores and waiting for retailers to start a sale before buying. The reality is that the world is not going to leave all retailers in the dust and not all global brands are at risk. At least that’s the take of a new Credit Suisse reinstatement of sector coverage.

Michael Binetti at Credit Suisse has taken a rather positive view of the softlines retail and global brands sector. Some of the drivers for the call were better near-term trends after the strongest holiday retail trends in several years were continuing into the first quarter. All in all, traffic was deemed to be “less bad” while inventory levels have been right-sized. On top of store closures, a better macroeconomic backdrop and tax reform are further adding support.

According to Binetti, stock selection still matters here. After all, the industry is still facing seismic long-term challenges.

Investors should consider that retailers are often cited as having had much higher corporate tax rates than those in other sectors. That puts it as a likely winner in tax reform. Also worth noting is that most traditional Buy and Outperform ratings come with upside of 8% to 10% at this stage in the bull market.

Credit Suisse’s top picks are PVH, Michael Kors, Burlington and Estee Lauder. The firm’s most “out of consensus calls” are in Ralph Lauren, Kors and Tiffany. Most of these have been outlined below, with trading history and consensus analyst target prices from Thomson Reuters.

Michael Kors Holdings Ltd. (NYSE: KORS) was reinstated in coverage with an Outperform rating and assigned a $75 price target (versus a $61.41 prior close). It has a consensus analyst target price of $71.80. The firm sees consensus estimates being too low here. The company also is considered to be in the middle innings of a familiar business turnaround.

Estee Lauder Companies Inc. (NYSE: EL) was started with an Outperform rating and assigned a target price of $162. Its prior close was $145.37 a share, and the consensus target price was $146.75. Estee Lauder has only a 1% dividend yield. The company’s powerful portfolio transformation boosts the firm’s conviction for upside.

Tiffany & Co. (NYSE: TIF) was started with an Outperform rating and assigned a target price of $120. Tiffany closed at $100.42, has a consensus analyst target of $111.48, and has nearly a 2% dividend yield. Despite recent sales lagging some expectations, the firm sees new investments and a solid valuation offering solid support.

Nike Inc. (NYSE: NKE) was reinstated with an Outperform rating and assigned a $78 target price. Shares previously closed at $66.82 and have a consensus target price of $67.47. Nike also has a 1.2% yield. Credit Suisse thinks that Nike’s revenue growth bottomed in the first quarter of fiscal 2018, and it sees several drivers reaccelerating revenues.

Burlington Stores Inc. (NYSE: BURL) was started with an Outperform rating and assigned a target price of $146 (versus a $125.54 close). The consensus analyst target price is $143.67. Burlington is considered the youngest of the off-price retailers and is underappreciated as a gross margin opportunity.

Lululemon Athletica Inc. (NASDAQ: LULU) was assigned an Outperform rating with a $96 target price. The stock previously closed at $80.33, and it has a 52-week range of $47.26 to $83.98 and a consensus target price of $83.56. The firm sees Lululemon as a rare example of a large brand that has been able to protect its price integrity by avoiding a reliance on recurring promotional sales and avoiding the outlet and off-price sales for additional growth.

Ross Stores Inc. (NASDAQ: ROST) was started with an Outperform rating and assigned a target price of $88 (versus a $76.43 close). Credit Suisse called it a company that has been a standout performer with consistent double-digit earnings growth from a balance of same-store sales gains and margin improvement.

Kohl’s Corp. (NYSE: KSS) was started with an Outperform rating and assigned a target price of $72. It previously closed at $63.76, has a consensus target price of $69.47 and has a 52-week range of $35.16 to $69.48. Kohl’s also has a dividend yield of about 3.8%. It is considered to be the first major department store to be seen as a reinvestment opportunity in years, and Credit Suisse was surprised how much Kohl’s traffic-driving strategies worked in the fourth quarter.

Foot Locker Inc. (NYSE: FL) was started with an Outperform rating and assigned a target price of $50. Shares closed at $43.32 ahead of this call, in 52-week range of $28.42 to $77.86. The consensus target price is $51.68. Foot Locker has a dividend yield of 3.2%. While Credit Suisse sees volatile same-store sales continuing in the first half of 2018, it thinks investors are being paid to wait for what should be improving trends in the second half of 2018.

Ulta Beauty Inc. (NASDAQ: ULTA) was started with an Outperform rating and assigned a target price of $245. It previously closed at $207.62 and has a 52-week range of $187.96 to $314.86. The consensus target price is $264.50. Despite a big stock pullback, Credit Suisse sees this as being a top retail growth story and that the bears targeting margins has become very overblown.

Ralph Lauren Corp. (NYSE: RL) was started as Outperform with a $125 price target. The stock closed at $107.48 ahead of the call, and it has a consensus target price of just $110.46. Ralph Lauren has almost a 2% dividend yield. The company is viewed as a having a solid stock backdrop during the “catch-up” trade when the brand returns from deeply negative trends.

VF Corp. (NYSE: VFC) was started with an Outperform rating and assigned a target price of $85. It closed at $73.21 a share ahead of the call and has a consensus target price of $81.44. The yield is close to 2.5%. The company is seen as having one of the strongest portfolio of brands that can combat ongoing softline challenges.

Tapestry Inc. (NYSE: TPR), the company formerly known as Coach, was started with an Outperform rating and assigned a target price of $60. Tapestry closed at $52.46 ahead of the call, and it has a consensus target price of just $53.24. Its dividend yield is roughly 2.5%. Credit Suisse noted that Tapestry has executed its Coach brand quality of sales plan, and also it was noted as removing Kate from a brand-dilutive distribution and closing 100 to 125 stores while it has lowered its Americas wholesale by 25% from the peak.

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