Goldman Raises PT On Ross Stores To $71, Introduces 2012 EPS Estimates

Goldman Sachs has published a research report on Ross Stores, Inc. ROST after 4Q earnings that show the company is on track for a "beat-and raise" in 2011.

In the report, Goldman Sachs writes "We continue to believe the company has set a conservative bar for 2011 and expect a beat-and-raise story to unfold throughout the year, driven by (1) better-than-plan sales (e.g. February's +3% SSS increase vs. +0-1% guidance), (2) gross margin opportunity through continued higher inventory turns and favorable economics on packaway merchandise during an inflationary environment, and (3) better SG&A leverage if above plan sales materialize. The company's longer-term dynamics are also favorable, given its square footage growth (+7% in 2011) and continued market share gains versus traditional retailers. We believe these positive fundamentals are reflected in the shares as they currently trade at 13.4X 2011E P/E, in line with the company's three-year average."

Goldman Sachs maintains its Neutral rating and has raised the price target to $71 from $69. Goldman Sachs has also introduced 2012 EPS of $6.35.

Ross Stores closed yesterday at $69.80.