Piper Sandler cuts Ollie’s stock price target to $124

On Thursday, Piper Sandler adjusted its price target on Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI) stock, bringing it down to $124 from the previous target of $126. Despite this slight reduction, the firm maintained an Overweight rating on the discount retailer’s shares, which has delivered an impressive 41.49% return over the past year. According to InvestingPro data, the stock currently trades at a P/E ratio of 30.67, suggesting a premium valuation relative to its peers.

Piper Sandler’s move follows Ollie’s recent fourth-quarter earnings report. The firm’s analysts see Ollie’s as having a particularly strong outlook for the year 2025, citing the company’s closeout business model as a robust strategy in the face of uncertain consumer spending. The company has demonstrated solid performance with 8.04% revenue growth in the last twelve months and maintains a strong financial position with a current ratio of 3.27. Additionally, the analysts believe that Ollie’s is well-positioned to benefit from the liquidation of Big Lots (NYSE:BIG), a factor they argue is not yet reflected in Ollie’s guidance for 2025. For deeper insights into Ollie’s financial health and growth prospects, InvestingPro subscribers can access comprehensive analysis and additional metrics in the Pro Research Report.

The analysts highlighted that Ollie’s comparable store sales trends are gaining momentum as the company moves beyond the disruptions caused by Big Lots store closures. They expect Ollie’s to reap market share gains, along with advantages in labor, real estate, and closeout opportunities arising from Big Lots’ exit from certain markets.

The revised price target of $124 is based on 28 times the estimated earnings per share for 2026. Despite the slight decrease in the price target, Piper Sandler’s analysts expressed confidence in the fiscal year 2025 guidance provided by Ollie’s, which they described as "properly conservative" and not fully accounting for the potential market share capture from Big Lots.

In other recent news, Ollie’s Bargain Outlet Holdings Inc. reported its fourth-quarter earnings for 2025, meeting expectations with an adjusted earnings per share (EPS) of $1.19, despite a slight revenue miss. The company achieved a 3% year-over-year increase in net sales, totaling $667 million, driven by new store openings and a comparable store sales growth of 2.8%. Analysts from Citi and Truist Securities have maintained a Buy rating for Ollie’s stock, with Citi setting a price target of $133 and Truist raising theirs to $126. Both firms highlighted Ollie’s strong performance in overcoming challenges such as competitive store closures and unfavorable weather conditions.

The company plans to open 75 new stores in 2025, aiming for a 10% annual unit growth. Ollie’s also projects total net sales between $2.564 billion and $2.586 billion for the fiscal year 2025, with a comparable store sales growth of 1-2%. Analysts from Truist Securities anticipate that Ollie’s unit growth for fiscal years 2025 and 2026 should surpass historical estimates, suggesting that the company’s guidance for 2025 might be modest. Furthermore, potential tariff-related order cancellations could present Ollie’s with inventory buying opportunities, supporting the company’s growth trajectory.

Ollie’s management expressed confidence in capturing market share amid economic pressures, emphasizing their adaptability and strategic initiatives, such as the acquisition of store leases from Big Lots and the launch of a private label credit card. With a robust balance sheet and strategic growth plans, Ollie’s Bargain Outlet appears well-positioned to continue its expansion in the competitive retail landscape.

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