Investors should buy department stores Ross Stores and Burlington Stores that will benefit in a rising inflation environment, according to Goldman Sachs. Analyst Brooke Roach initiated coverage of the two companies with buy ratings, saying they will outperform even as other apparel retailers struggle with pullbacks in consumer spending. “The outlook for the apparel sector continues to weaken, with rising industry inventory levels, pressures to consumer discretionary income, inflationary headwinds, and ongoing cost pressures that weigh on margins and returns,” Roach wrote in a Monday note. “Against this backdrop, we see the off-price sector as defensively positioned and initiate coverage of BURL and ROST at Buy.” Shares of Ross Stores could see roughly 24% upside from here, based on a 12-month price target of $102 per share, as the company expands its store footprint. The analyst believes Ross Stores will continue to increase its market share as consumers trade down. “While its exposure to the low-income consumer will likely weigh on near-term results, we believe Y/Y comp gaps will narrow going forward on the back of stronger inventory availability and execution,” Roach wrote. Burlington could jump 22% from here as the brand grows in popularity among customers, and as the apparel chain improves its stores. Goldman has a 12-month price target of $183 per share on the company. “While we acknowledge that BURL has near-term execution risk given a larger store size, higher inventory levels, and recent fundamental underperformance vs. peers, we believe this is largely reflected in valuation and estimates, and believe sequential improvement from here could result in greater market share capture,” the analyst wrote. To be sure, Roach’s second-quarter estimates are below consensus for the two stocks, as the analyst expects performance will fall in the near term, according to the note. “While we may be early in calling for sequential improvement from the worst of the Y/Y comp and margin declines, we believe that increasing visibility to improvement in execution and financial performance will likely drive share outperformance,” Roach wrote. –CNBC’s Michael Bloom contributed to this report.