Loop Capital has adjusted its outlook on Ross Stores, Inc. (NASDAQ: NASDAQ:ROST), increasing the price target to $190 from the previous $170 while sustaining a Buy rating on the shares.
The decision follows the company's second-quarter earnings report, which showcased a 4% growth in comparable store sales, surpassing the analyst's projection by 100 basis points.
In line with the company's recent performance, Ross Stores also revised their full-year earnings per share (EPS) forecast upward by approximately 19 cents.
The updated outlook from Ross aligns with general expectations, marking a notable move from the typically conservative guidance provided by the company's management.
Loop Capital's continued endorsement of Ross Stores stems from the anticipation that the off-price retail sector will experience a market share increase this year. The growth is expected due to the closures of department stores and their diminishing relevance, which could benefit off-price retailers like Ross.
Ross Stores' third-quarter outlook is set to meet the consensus estimates, and the company's projections for comparable store sales growth of 2-3% for the third and fourth quarters are already matched by both Loop Capital's and consensus estimates. The consensus for EPS is positioned at the midpoint of Ross's third-quarter forecast and closer to the lower end for the full year 2024.
InvestingPro Insights
As Ross Stores, Inc. (NASDAQ:ROST) continues to thrive in the competitive off-price retail sector, recent data from InvestingPro provides additional context to Loop Capital's optimistic outlook. The company's stock is noted for its low price volatility, which may appeal to investors looking for stable equity. This stability is underpinned by Ross Stores' ability to consistently raise its dividend, with a track record of 31 consecutive years of dividend payments, and a recent increase for the past three consecutive years. This demonstrates the company's commitment to shareholder returns and financial health.
Moreover, Ross Stores is trading at a low P/E ratio relative to near-term earnings growth, sitting at 25.63, which suggests that the stock could be undervalued given its growth prospects. The company's strong return over the last three months, with a price total return of 15.96%, aligns with the positive sentiment from analysts and supports the increased price target from Loop Capital.
Investors looking for further insights will find additional InvestingPro Tips on Ross Stores, which cover various aspects ranging from the company's industry position to its financial health. In total, there are 13 more InvestingPro Tips available that delve into the specifics of Ross Stores' market performance and projections. These tips can be accessed for a deeper analysis and understanding of the company's potential, helping investors make informed decisions.
For a comprehensive look at Ross Stores' financial metrics and strategic positioning, interested readers are encouraged to explore the full list of InvestingPro Tips at: https://www.investing.com/pro/ROST.
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