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Morgan Stanley Report Reveals Retailers to Benefit Most from Lower Gas Prices

Brands that are most popular with lower income consumers stand to benefit the most from the dip in gas prices, as they may be more likely to put the money they save toward new purchases.

As of Friday, the national average gas price was $2.32 per gallon, the lowest it has been since 2009, and the low prices are expected to remain into the new year.

According to a Morgan Stanley research report published last week, analysts noted that only a small percentage of higher income consumers’ spending goes toward gas, making the decline in oil prices less likely to alter their spending habits. Lower income consumers on the other hand, pay a larger portion of their income for gas, and the price reduction could mean more discretionary spending.

It follows, then, that apparel and footwear brands that target lower income consumers will see the biggest benefit from the gas price plunge.

Morgan Stanley analysts named Children’s Place (PLCE), Foot Locker (FL), Finish Line (FINL), Brown Shoe Company and Skullcandy (SKUL), Aeropostale (ARO), Burlington Stores (BURL) and Ross Stores (ROST) as stocks they expect to see the biggest boon.