Ollie's stock target increased, rating held on strong trends

On Wednesday, RBC Capital Markets adjusted their stance on shares of Ollie's Bargain Outlet (NASDAQ:OLLI), increasing the price target to $130 from the previous $120, while the Outperform rating remains unchanged. This adjustment follows a review of the company's third-quarter performance and forward-looking projections.

The analyst from RBC Capital observed that the impact from liquidation events was less severe than anticipated. The guidance implied for the fourth quarter suggests that the company's comparable store sales trends continue to be robust.

The analyst also pointed to the potential for Ollie's to expand its market share in 2025, bolstered by the expected closure of approximately 205 competing Big Lots (NYSE:BIG) stores within close proximity to Ollie's locations by the end of the fourth fiscal quarter.

In light of these developments, the analyst has revised the fourth-quarter comparable sales forecast to a 3.0% increase, up from the previous 2.0%, and adjusted the earnings per share (EPS) estimate to $1.22 from $1.17.

For the fiscal years 2025 and 2026, the projections for comparable sales growth remain unchanged at 3.5% and 2.0%, respectively. However, the adjusted EPS estimates for these years have been increased to $3.92 and $4.35, up from $3.84 and $4.28.

The raised stock price target of $130 is based on an approximate 30 times multiple of the revised 2026 adjusted EPS estimate of $4.35. The analyst's insights reflect confidence in the company's growth trajectory and its ability to capitalize on market opportunities in the coming years.

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