- Morgan Stanley analyst Kimberley Greenberger reiterated an Overweight rating on Ross Stores Inc ROST with a price target of $118.
- The analyst said Ross Store's Q2 EPS surpassed expectations due to lower incentive costs.
- The management's move to cut FY guidance appears prudent in light of the uncertain macroeconomic backdrop & the company's two consecutive topline misses, added Greenberger.
- The 55% rise in the inventory level, the analyst thinks is mostly the result of early inventory receipts against expectations for longer lead times and is comparable to pre-pandemic levels.
- Greenberger regards the inventory & trade-down benefits should support performance acceleration as consumers seek value which is likely to happen in the second half and 2023.
- The market share capture from competitor bankruptcies/store closures, favorable customer fundamentals, and high Hispanic exposure, the fastest growing population in the U.S., support revenue and earnings growth prospects.
- Credit Suisse analyst Michael Binetti maintained an Outperform rating on the shares and raised the price target to $99 from $92.
- Wells Fargo analyst Ike Boruchow maintained an Equal-Weight rating on the shares and raised the price target to $90 from $80.
- Telsey Advisory Group analyst Dana Telsey maintained a Market Perform rating on the shares with a price target of $80.00.
- Telsey said Q2 performance reflected continued macro and inflationary headwinds that have resulted in a more promotional retail environment and increasing freight costs along with inflation impact on customers.
- BMO Capital analyst Simeon Siegel reiterated an Outperform rating on the shares and raised the price target to $95.00 from $92.00.
- Siegel believes this is the second quarter with more questions than answers, and heightened inventory will need monitoring ahead of looming discounts.
- UBS analyst Jay Sole maintained Ross Stores with a Neutral and raised the price target from $85 to $92.
- Baird analyst Mark Altschwager maintained Ross Stores with an Outperform and increased the price target from $90 to $105.
- Price Action: ROST shares are trading lower by 1.17% at $90.92 on the last check Friday.
- Photo Via Wikimedia Commons
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