Ross Stores (ROST – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Matthew Boss from J.P. Morgan maintained a Buy rating on the stock and has a $163.00 price target.
Matthew Boss has given his Buy rating due to a combination of factors including Ross Stores’ robust fourth-quarter performance and an optimistic outlook for fiscal year 2024. In the final quarter of 2023, Ross Stores exceeded expectations with a 7% increase in same-store sales, more than double the consensus estimate of 3.5%. Additionally, the company saw a significant expansion in gross profit margin and earnings before interest and tax (EBIT) margin, which surpassed market predictions. Boss observed that the growth in same-store sales was the highest since 2011, excluding pandemic years, and was primarily driven by increased customer traffic and favorable responses to Ross Stores’ improved product assortments.
Looking ahead, Ross Stores’ management has provided a forecast for fiscal year 2024 that suggests continued growth in same-store sales, setting guidance ahead of historical precedents. Despite taking a conservative approach due to macroeconomic uncertainties, the company’s initial guidance for the year indicates a more optimistic same-store sales growth than the usual 1-2% start-of-year forecast. Matthew Boss also notes that Ross Stores is well-positioned within the off-price retail sector with potential market share gains from department store losses and room for growth through store expansion. This strategic positioning, coupled with the company’s strong balance sheet and cash flow generation, underpins Boss’s confidence in the stock’s performance and the raised price target.
In another report released today, Bank of America Securities also reiterated a Buy rating on the stock with a $170.00 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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