Citi maintains Buy on Ollie’s stock with $133 target

Published 20/03/2025, 12:42
Citi maintains Buy on Ollie’s stock with $133 target

On Thursday, Citi reaffirmed its positive stance on Ollie’s Bargain Outlet Holdings Inc. (NASDAQ:OLLI) with a Buy rating and a price target of $133.00. Currently trading at $107.94, the stock has shown strong momentum with a 41.5% return over the past year. According to InvestingPro data, analyst targets range from $105 to $135, with the company maintaining a "GOOD" overall financial health score. The endorsement follows the company’s release of its fourth-quarter results, which showcased better-than-expected same-store sales (SSS) and a promising start to the first quarter, despite broader concerns about consumer spending.

The Citi analyst highlighted several key points that underpin Ollie’s positive outlook. Notably, the conservative forecast for fiscal year 2025 is expected to benefit from market share gains as competitors close stores. The company’s solid financial position is evident in its 8.04% revenue growth and healthy 40.25% gross profit margin. Furthermore, management’s optimism regarding product availability amid industry disruptions suggests a strong pipeline for sales drivers in the second half of the year.

Ollie’s Bargain Outlet’s recent earnings report revealed a robust fourth quarter, with same-store sales surpassing forecasts. The company also indicated an uptick in business performance in the early part of the first quarter. This comes amid a landscape where consumer spending is under scrutiny, suggesting that Ollie’s may be defying broader market trends.

The analyst also pointed to potential benefits arising from tariffs, which could present opportunities for Ollie’s to attract customers. The expectation of increased product availability over the next three to six months due to industry disruptions is anticipated to fuel same-store sales growth in the latter half of the year.

In summary, Citi’s analysis suggests that Ollie’s Bargain Outlet is well-positioned within the retail sector. The company’s ability to capitalize on market dynamics, including competitor store closures and tariff-related opportunities, supports the analyst’s reiterated Buy rating and confidence in the stock’s future performance. For deeper insights into OLLI’s valuation and growth prospects, including access to 10+ additional ProTips and comprehensive financial metrics, explore InvestingPro’s detailed research report.

In other recent news, Ollie’s Bargain Outlet Holdings Inc. reported its fourth quarter 2025 earnings, achieving an adjusted EPS of $1.19, which met analyst expectations. The company experienced a 3% year-over-year increase in net sales, reaching $667 million, although this was slightly below the forecast of $674.64 million. Ollie’s plans to expand by opening 75 new stores in 2025, aiming for a 10% annual unit growth, which aligns with its long-term growth strategy. Truist Securities expressed a positive outlook on Ollie’s, with analyst Scot Ciccarelli raising the firm’s stock price target to $126 from $121 and maintaining a Buy rating. Ciccarelli noted the company’s strong fourth-quarter performance despite challenges like competitive store closures and unfavorable weather. The acquisition of store leases from Big Lots (NYSE:BIG) is expected to support Ollie’s future growth, and the company has also launched a private label credit card to enhance its offerings. Ollie’s projects total net sales between $2.564 billion and $2.586 billion for fiscal year 2025, with a comparable store sales growth of 1-2% and a gross margin target of approximately 40%.

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