These 4 retail stocks should benefit as the economy reopens, Bank of America says

• Some US states have begun to slowly reopen parts of their economies this week following coronavirus-induced shutdowns.
• A group of retail stocks located off-mall are likely to see early benefits, according to a Wednesday note from Bank of America analysts led by Lorraine Hutchinson.
• Here are the four stocks that Bank of America says should benefit from the economy reopening.
• Read more on Business Insider.

This week, some states in the US have begun to slowly reopen parts of their economies after sweeping lockdowns due to the coronavirus pandemic.

As the economy reopens, a group of retail stocks is slated to benefit, according to a Wednesday note from Bank of America analysts led by Lorraine Hutchinson.

"Stores located off-mall are likely to see early benefits from reopening as consumers avoid crowded malls," Hutchinson wrote. In addition, stores such as Burlington Stores and TJ Maxx parent company TJX "should benefit from early reopening due to off-mall locations and their lack of ecommerce penetration."

Not all retailers stand to benefit from the reopening of the economy, Hutchinson said. There is some risk to mall-based retailers such as Macy's, Nordstrom, Gap, and American Eagle, as their customers may "opt for easier online or off-mall shopping formats," according to the note.

Read more: An expert tech investor beating 97% of his peers reveals the most important trends in his portfolio — and breaks out his top 3 stock picks for the next decade

A slow ramp-up of store openings will allow retailers to gauge demand to plan for a national rollout, Hutchinson said. Still, there is a lot of work to be done — retailers have many steps that need to be taken before they can reopen, including buying masks for employees, establishing social distancing guidelines for shoppers, and setting cleaning schedules, BofA said.

Global brands such as Ralph Lauren, Capri Holdings, and Levi Strauss, "will have the advantage of using best practices established in Asia, including staffing, cleaning and communicating with customers," Hutchinson wrote. "LB's Bath & Body Works is currently operating two stores in Ohio, which will help inform its opening program."

Retailers will also have to weigh the cost of opening stores with the likely lower sales numbers that would come from limiting shoppers. In many cases, Hutchinson said that stores will reopen "because the increased ability to clear through excess inventory is crucial to not only improve working capital but also make room for Back to School and Fall inventory which will arrive mid-late summer."

Here are the four stocks that Bank of America says will benefit from the economy reopening:

4. Five Below

Business Insider/Jessica Tyler

Ticker: FIVE

Price target: $100

Rating: Buy

Source: Bank of America

3. TJX Companies

Business Insider/Mary Hanbury

Ticker: TJX (owns HomeGoods, Marshalls, and TJ Maxx)

Price target: $60

Rating: Buy

Source: Bank of America

2. Ross stores

Justin Sullivan/Getty Images

Ticker: ROST

Price target: $105

Rating: Buy

Source: Bank of America

1. Burlington Stores

Mike Kalasnik

Ticker: BURL

Price target: $200

Rating: Buy

Source: Bank of America