Piper Jaffray Downgrading Ross Stores To Neutral (ROST)

Piper Jaffray is cutting its rating on shares of Ross Stores, Inc. ROST to Neutral from Overweight, and lowering its price target to $52 from $61. This comes from concerns of a tough environment. In a note to clients, Piper Jaffray writes, "We are downgrading ROST to Neutral as price declines at full price retailers are eliminating some of the pricing advantage within the off-price sector. In addition, the company is heavily concentrated in CA which is likely to be a headwind as the housing market remains challenging. Finally, we also believe the lack of stimulus directed to the low income consumer is having an effect on its dds concept. While we believe exposure to sales tax holiday states likely drove inline results for the month of August, we believe follow through into holiday will be difficult. We are maintaining our ests but lowering our price target to $52 based on 11x FY12E EPS." Shares of Ross Stores closed at $50.36 yesterday, good for a gain of 16 cents.