Mizuho raises Tractor Supply stock target to $62, keeps Outperform

On Thursday, Mizuho (NYSE:MFG) Securities maintained its Outperform rating on Tractor Supply Company (NASDAQ:TSCO) shares and increased the price target to $62 from the previous $60. The firm anticipates a positive outlook for the company as it prepares to announce its fourth-quarter results and guidance for the fiscal year 2025 next week. According to InvestingPro analysis, TSCO maintains a GOOD financial health score, though current metrics suggest the stock may be trading above its Fair Value.

The optimism stems from a surge in cold-weather demand towards the end of the period, which is expected to contribute to a strong start in the first quarter. Tractor Supply's stock has already been performing well, with an 8% increase since the beginning of the year, outpacing the S&P 500's 3% rise.

Mizuho's analysis suggests that Tractor Supply is poised for continued growth as it navigates past the peak of top-line pressures in the upcoming quarters. The firm projects that the company can achieve low single-digit percentage comparable store sales growth in fiscal year 2025. This expectation is supported by an improving agriculture and rural economy sentiment, shifts in consumer spending on pet products, and a modest level of inflation expected in the second half of the year. The company's strong fundamentals are evidenced by its 15-year track record of consecutive dividend increases and healthy gross profit margin of 36.29%.Discover more valuable insights about TSCO and 1,400+ other stocks with InvestingPro's comprehensive research reports, which transform complex financial data into actionable intelligence.

Moreover, Mizuho points out that Tractor Supply is implementing several margin-enhancing initiatives that should help balance the costs associated with last-mile delivery and efforts to attract professional customers during this transition year. These strategies are seen as flexible and can be adjusted as needed.

Mizuho concludes its assessment by recommending that investors remain buyers of Tractor Supply stock as the company approaches its fourth-quarter earnings report, with the price target now set at $62.

In other recent news, Tractor Supply Company has made several notable strides. The company has announced a 5-for-1 stock split, increasing its authorized shares to 2 billion. This move is expected to enhance share liquidity and accessibility to a broader investor base. Tractor Supply has also completed the acquisition of Allivet, an online pet pharmacy, a strategic move that is projected to present a $1 billion revenue opportunity.

Analysts have responded to these developments. BofA Securities adjusted the price target for Tractor Supply to $53.00, maintaining an Underperform rating, while Mizuho Securities upgraded the company's stock rating to Outperform, citing positive trends in the pet sector and recovery from commodity price deflation. Truist Securities, despite a slight reduction in price target post-stock split, maintained a Buy rating on the stock.

These recent developments underscore Tractor Supply's commitment to growth and expansion. The company's strategic initiatives, such as the Allivet acquisition and the stock split, are part of its ongoing efforts to manage its capital structure and reflect confidence in its long-term growth prospects. These developments are part of the recent news surrounding Tractor Supply Company.

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