On Wednesday, Piper Sandler maintained an Overweight rating on Ollie's Bargain Outlet (NASDAQ:OLLI) and increased the price target to $126.00 from $107.00. This revision follows Ollie's third-quarter financial results, which, despite a slight miss on the top line due to warmer weather, showcased the company's resilience and strong execution in the discount retail sector.
The firm highlighted Ollie's ability to continue impressing investors, as evidenced by the stock's +12% surge on the day. The analyst cited Ollie's robust value proposition and exceptional operational performance as key factors in their positive outlook. Moreover, the company is expected to benefit from the approximately 550 store closures announced by Big Lots (NYSE:BIG), which could potentially lead to more in the future.
According to the analyst, the announced store closures by Big Lots are projected to contribute a +2.5% lift to Ollie's comparable store sales (comps) in 2025. This factor, combined with the potential for additional closures, sets Ollie's up for several years of 20%+ earnings per share (EPS) growth.
Looking ahead, 2025 is anticipated to be a year of above-trend EPS growth for Ollie's, driven by strong new store openings in the first half of the year. The company's strategic expansion and the industry dynamics are expected to positively influence its financial performance in the coming years.
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