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On Monday, Mizuho (NYSE:MFG) Securities adjusted its outlook on Tractor Supply Company (NASDAQ:TSCO) shares by reducing the price target from $62.00 to $58.00, while retaining an Outperform rating on the stock. The stock, currently trading near its 52-week low at $49, has seen 14 analysts revise their earnings estimates downward for the upcoming period, according to InvestingPro data. The broader analyst consensus shows price targets ranging from $44 to $65, reflecting mixed sentiment about the company’s near-term prospects. The adjustment follows a recent discussion with Tractor Supply’s CEO Hal Lawton and CFO Kurt Barton, where the management defended the company’s core business amid modest softening and provided an unclear forecast for the fiscal year 2025.
The management team presented an updated guidance that accounts for various scenarios, including the potential impact of tariff costs and anticipated price increases in the second half of the year. They also acknowledged some expected pressures on units and margins. InvestingPro analysis shows the company maintains a moderate debt level with a current ratio of 1.41, while delivering a solid gross profit margin of 36.32% over the last twelve months. For deeper insights into Tractor Supply’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers. Despite a quarter that did not meet expectations, Mizuho analysts remain optimistic about the company’s prospects, particularly noting the absence of significant weakness in consumer spending.
Additionally, management countered the perception that Tractor Supply has become more sensitive to economic cycles, pointing out that the proportion of big-ticket sales remains consistent with 2008 levels. They also emphasized the company’s resilience due to its larger pet and animal product mix. A highlight for the company has been the success of its "Chick Days" promotion, which has attracted new customers and is likely to lead to recurring purchases.
The revised price target of $58 reflects Mizuho’s assessment of these factors, as well as the potential for Tractor Supply to emerge as a relative standout during a generally weak first quarter for the retail sector. Despite the lower price target, the Outperform rating indicates that Mizuho analysts still see Tractor Supply as a favorable investment option. The company has demonstrated its commitment to shareholder returns, maintaining dividend payments for 16 consecutive years with a current yield of 1.88%. InvestingPro subscribers can access additional insights, including 8 more ProTips and detailed valuation metrics, to make more informed investment decisions.
In other recent news, Tractor Supply Company reported its financial results for the first quarter of 2025, missing analysts’ expectations for both earnings per share (EPS) and revenue. The company’s EPS was $0.34, falling short of the forecasted $0.37, while total sales were $3.47 billion, below the expected $3.55 billion. Despite these challenges, the company remains optimistic about its growth prospects, driven by strategic initiatives such as diversifying sourcing and improving supply chain resilience. In another development, Jefferies adjusted its price target for Tractor Supply, reducing it from $53.00 to $51.00 and maintaining a Hold rating on the stock. The adjustment reflects concerns over weak seasonal demand and consumer hesitancy in making large purchases. Tractor Supply has also revised its guidance downward, factoring in potential tariff relief after the second quarter. Investors and analysts will keep a close eye on the company’s performance amid these developments, particularly regarding tariff impacts and consumer spending trends.
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