Morgan Stanley says Black Friday made retail winners even more clear. See which stocks it likes

Morgan Stanley said Black Friday traffic provided further evidence that some retail names are outperforming their peers. Equity analyst Alex Straton said Black Friday proved to be a "powerful demand catalyst" as shoppers searched for the best deals online and in store. However, she said the difference within softline retail's top performers and laggards became even more evident in the firm's store checks on Friday. "The spread between the top & bottom 5 banners in our store checks widened y/y for both line counts & discounting breadth," she wrote to clients, using shorthand for the term "year over year." For the second half of the year, this is "emboldening our view that leaders/laggards will be made more evident," the analyst added. Straton noted that eight of the busiest holiday shopping days are still to come, so the leader board still has time to shuffle. However, the analyst does have an idea of what stocks are currently on the top performers list from the softline retail cohort. Here are the four she highlighted in a Sunday note to clients: Lululemon 's inclusion can bode well ahead of the athleisure retailer's earnings report due on Thursday. Straton called Lululemon the "clear winner" within sportswear. It comes amid a tough year for the stock, with shares dropping more than 34% despite the broader market's uptrend. Wall Street sees more downside ahead, with the average analysts polled by LSEG holding a price target that implies a further drop of nearly 5%. Despite that, the majority of analysts have a buy or strong buy rating. LULU YTD mountain Lululemon Athletica shares in 2024 Victoria's Secret also made the list. The stock surged nearly 8% to a 52-week high on Monday, bringing its year-to-date gain to almost 58%. Wall Street analysts are split on how to play the stock, with about a third of them rating the name a buy or strong buy. However, the average price target implies downside of close to 30% over the next year, according to LSEG. Investors should be discerning when thinking about these retail winners and losers as stock plays. Straton listed Coach as a likely winner, for instance, while naming Kate Spade as potential loser. Both are part of Tapestry , meaning one company can house brands on different sides of the spectrum. In addition to Kate Spade, Straton also put American Eagle Outfitters and Foot Locker in the camp of likely laggards this holiday season.