Wells Fargo's Retail Analyst Is Bullish On The Sector: Here's Why

Ike Boruchow, Wells Fargo's retail analyst, has plenty of company among his analyst peers in painting a dire picture of the retail sector. However, where the analyst differs from many others in the sense that he is optimistic on the segment over the long term.

Speaking as a guest on CNBC's "Halftime Report," Boruchow did acknowledge the fact that February's mall traffic was among the worst in years — and this came after a disappointing December performance. As such, the retail group has underperformed the market by 1,500 basis points since Dec. 1.

Analyst's Perspective

However, the analyst argued that December and February's poor metrics coupled with a delay in tax refunded payouts implies that the trends can only get better from here.

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"Take a step back and there might be a trade to be made even though the investability of it is still a little bit under the microscope," the analyst said.

Another positive development for the retail group is the fact that there has been no official announcement from the Trump White House concerning the proposed border tax. In fact, the president and his team have met with many retail CEOs, and the final tax won't be as bad as many fear.

A Few Names

Needless to say the analyst isn't bullish on every name in the retail sector and recommends owning PVH Corp PVH, Coach Inc COH along with off-price retailers like Ross Stores, Inc. ROST.

"You want to look for those names — those quality names that are kind of getting beat up a bit," he explained.

SPDR S&P Retail (ETF) XRT is currently down 0.34 percent year-to-date and up 2.88 percent over the past month.