Analyst Lorraine Hutchinson of Bank of America Securities reiterated a Buy rating on Ross Stores (ROST – Research Report), with a price target of $170.00.
Lorraine Hutchinson’s rating is based on the impressive performance of Ross Stores (ROST), which has demonstrated a robust capacity to attract consumers seeking value, especially in a market where buyers are increasingly budget-conscious. Hutchinson acknowledges that ROST’s assortments have been well-received, leading to a significant earnings per share (EPS) beat in the fourth quarter, surpassing both Bank of America’s and consensus estimates. The company’s comparable store sales grew by 7%, exceeding their guidance of 1-2%, indicating a strong consumer response to ROST’s pricing and merchandise strategies. Furthermore, with management setting optimistic guidance for the upcoming fiscal year and continued execution on effective pricing strategies anticipated, Hutchinson has raised both the fiscal year 2024 and 2025 EPS estimates.
Hutchinson also notes the broad-based sales growth across different regions and customer demographics, reinforcing the strength of ROST’s business model. Despite a slowdown in the growth of dd’s discount stores due to fewer openings than anticipated, the company’s core Ross Stores chain continues to perform well. ROST is honing its pricing strategy to emphasize sharper price points, aiming to cement its reputation as a value leader and capture additional market share. Additionally, gross margin improvements, driven by lower freight costs among other factors, are expected to contribute to ongoing profitability. These combined elements contribute to Hutchinson’s conviction in setting a Buy rating and increasing the price objective to $170, underscoring confidence in ROST’s ability to maintain its momentum and deliver shareholder value.
Hutchinson covers the Consumer Cyclical sector, focusing on stocks such as Bath & Body Works, Nike, and Tapestry. According to TipRanks, Hutchinson has an average return of 5.0% and a 55.25% success rate on recommended stocks.
In another report released yesterday, Guggenheim also maintained a Buy rating on the stock with a $165.00 price target.
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Ross Stores (ROST) Company Description:
California-based Ross Stores, Inc. operates off-price retail apparel and home accessories stores under the Ross Dress for Less and dd’s DISCOUNTS brands. Its products include branded and designer apparel, accessories, footwear, and home fashions.
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