Ross Stores stock initiated at Neutral by BTIG, citing valuation concerns

Investing.com - BTIG initiated coverage on Ross Stores, Inc. (NASDAQ:ROST), a $50.5 billion market cap specialty retailer, with a Neutral rating on Tuesday, as the research firm expressed caution about the stock’s current valuation. The company currently trades at a P/E ratio of 24.6x.

In its research note, BTIG established fiscal year 2025 earnings per share estimates of $6.21 and fiscal year 2026 estimates of $6.85 for the off-price retailer.

BTIG analyst Robert Drbul noted that while the firm generally favors the off-price retail sector, Ross Stores’ current share price presents valuation concerns.

The research firm specifically pointed out that Ross Stores is trading within 10% of its 52-week high, suggesting limited upside potential at current levels.

BTIG recommended investors wait for "a better entry point in the shares" before establishing positions in the off-price retailer.

In other recent news, Ross Stores has completed its fiscal 2025 expansion with the opening of 40 new stores across 17 states. This includes 36 Ross Dress for Less locations and four dd’s DISCOUNTS, bringing the total new store count to 90 for the year. Additionally, Ross Stores announced the appointment of William Sheehan as the new Executive Vice President and Chief Financial Officer, effective October 1, 2025. Sheehan, who has been with the company since 2006, will succeed Adam Orvos.

On the analyst front, TD Cowen has raised its price target for Ross Stores to $162 while maintaining a Buy rating. UBS also increased its price target to $147, maintaining a Neutral rating, and noted the company’s potential to outgrow department store peers. Meanwhile, Bernstein SocGen Group reiterated its Market Perform rating with a $147 price target, describing its outlook as "optimistically cautious" following Ross Stores’ recent fiscal guidance. These developments reflect a mix of strategic growth and cautious optimism from analysts regarding Ross Stores’ future performance.

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