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On Monday, Evercore ISI maintained its In Line rating and $55.00 price target for Tractor Supply Company (NASDAQ:TSCO) stock, with the target falling within the broader analyst range of $46-$67. According to InvestingPro data, the company currently trades at a P/E ratio of 24.48x, suggesting a premium valuation relative to its near-term earnings growth. The firm’s analysts highlighted the company’s consistent demand-driven and needs-based comparable sales (comps), which have shown remarkable stability over time. Tractor Supply has recorded negative comps only once in the past 32 years, which occurred in 2009. The analysts’ expectations for the first quarter (1Q) earnings are aligned with the market consensus, while their projections for 2025 fall slightly short.
Tractor Supply’s 1Q results are anticipated to be released on April 24th, and there is a possibility of management revising its 2025 guidance. Historically, the company has refrained from altering guidance after the first quarter, but current factors such as tariffs and consumer sentiment may prompt a more cautious outlook. Evercore ISI’s 2025 earnings per share (EPS) estimate is $0.04 below the street’s consensus, and their comp estimate is approximately 30 basis points lower.
The company’s stock has performed well year-to-date, surpassing the general market, Home Depot (NYSE:HD), Lowe’s (NYSE:LOW), and Floor & Decor Holdings (FND). It is currently trading at a premium of around 20% over the market, or 21 times Evercore ISI’s projected 2026 EPS of $2.40. The analysts find it challenging to foresee significant multiple expansion, as Tractor Supply’s earnings are not considered to be undervalued compared to Home Depot’s. The firm suggests that a more favorable view could emerge if Tractor Supply’s stock falls below 20 times the projected 2026 earnings.
In their analysis, Evercore ISI pointed out that web traffic for Tractor Supply has improved, correlating with colder weather in January and milder temperatures in March. This is seen as beneficial for the sell-through of winter weather stock keeping units (SKUs) early in the quarter and for early spring sales later in the quarter. InvestingPro analysis shows the company maintains strong financial health with a ’GOOD’ overall score, supported by revenue growth of 2.25% and sufficient cash flows to cover interest payments. Additional ProTips and detailed financial metrics are available for subscribers. Additionally, improvements in the Consumer Price Index (CPI) and Producer Price Index (PPI) data are expected to have contributed to a sequential improvement in ticket size. The analysts have reiterated their estimate of a 1% increase in comps for the first quarter.
In other recent news, Tractor Supply Company reported its fourth-quarter earnings for 2024, revealing a slight miss in both earnings per share (EPS) and revenue compared to forecasts. The company posted an EPS of $0.44, just below the anticipated $0.45, and revenue came in at $3.77 billion against a forecast of $3.79 billion. Despite these shortfalls, Tractor Supply has announced a dividend increase to $0.23 per share, marking a 4.5% rise from the previous year, and expanded its share repurchase program by $1 billion. Analyst firms such as Telsey Advisory Group and Piper Sandler maintain positive ratings on Tractor Supply, with Telsey setting a $67 price target and Piper Sandler a $65 target, citing optimism in the company’s strategic initiatives and market positioning. DA Davidson also reaffirmed a Buy rating, highlighting Tractor Supply’s product advantage over competitors like Amazon (NASDAQ:AMZN). Additionally, the company plans to expand its store network significantly, aiming to open 90 new locations in 2025. These developments are part of Tractor Supply’s long-term "Life Out Here 2030" strategy, which includes enhancing store formats and expanding product offerings in areas like pet care and garden centers.
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