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On Tuesday, KeyBanc Capital Markets increased its price target on Ollie’s Bargain Outlet Holdings Inc. (NASDAQ: OLLI) shares, boosting it from $125.00 to $135.00. The firm has maintained its Overweight rating on the discount retailer’s stock, which is currently trading at $120.75 and has delivered an impressive 65% return over the past year. According to InvestingPro analysis, the stock appears to be trading above its Fair Value, with a P/E ratio of 36.9x.
The adjustment follows recent market activities where Walmart Inc. (NYSE: NYSE:WMT) reported stronger-than-anticipated comparable store sales growth for the first quarter. The positive performance was noted to have gained momentum as the quarter advanced. KeyBanc’s analyst, Bradley B. Thomas, indicated that their data and checks suggest Ollie’s Bargain Outlet may also see potential for comparable store sales (comps) to surpass initial expectations. The company has demonstrated solid performance with 8% revenue growth in the last twelve months and maintains a strong financial position with a current ratio of 3.27.
In contrast to the optimistic projections for Ollie’s, the outlook for Target Corporation (NYSE: NYSE:TGT) was not as favorable, with the analyst predicting a potential downside. Meanwhile, expectations for Dollar Tree, Inc. (NASDAQ: NASDAQ:DLTR), Dollar General Corp . (NYSE: NYSE:DG), and Five Below, Inc. (NASDAQ: NASDAQ:FIVE) were for reports in line with market expectations.
Thomas elaborated on the decision to raise the price target for Ollie’s Bargain Outlet, stating, "Our top ideas in the sector remain WMT and OLLI, both Overweight rated. For 1Q, WMT reported better than expected comp growth, with trends improving as the quarter progressed. Our data and checks point to upside potential to comps for OLLI and DLTR, in-line reports from DG and FIVE, and downside potential for TGT. As such, we raise our price target to $135 (from $125) to reflect a more positive outlook for OLLI."
Investors in Ollie’s Bargain Outlet will be watching closely to see if the company’s performance aligns with KeyBanc’s expectations, with the next earnings report due on June 4th. InvestingPro subscribers can access 14 additional exclusive tips and comprehensive analysis about OLLI’s financial health, which is currently rated as GOOD by their proprietary scoring system. The raised price target reflects a more optimistic view of the company’s potential in the current retail environment.
In other recent news, Ollie’s Bargain Outlet has reported strong fourth-quarter earnings, showcasing resilience in a challenging consumer environment. The company’s same-store sales growth of 2.8% exceeded market expectations, with a full-year gross margin of 40.3% and an adjusted EBITDA margin of 13.8%. UBS has responded by raising its price target for Ollie’s to $123, reflecting confidence in the company’s continued profitability and expansion plans. RBC Capital Markets maintained an Outperform rating with a $133 price target, citing Ollie’s robust business fundamentals and potential market share gains from competitors like Big Lots (NYSE:BIG).
Meanwhile, Piper Sandler adjusted its price target to $124 while maintaining an Overweight rating, highlighting Ollie’s strong outlook for 2025 and its potential benefits from Big Lots’ liquidation. Citi also reaffirmed a Buy rating with a $133 target, noting Ollie’s better-than-expected same-store sales and promising start to the first quarter. The analyst emphasized potential market share gains as competitors close stores and anticipated increased product availability due to industry disruptions.
Truist Securities raised its price target to $126, maintaining a Buy rating, and pointed to Ollie’s ability to overcome challenges such as competitive store closures and adverse weather. The analyst expects Ollie’s unit growth to surpass historical expectations, suggesting the company’s guidance for 2025 might be modest. Overall, these developments indicate a positive outlook for Ollie’s Bargain Outlet as it navigates market dynamics and continues its growth trajectory.
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