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JPMorgan maintained its Overweight rating on Ross Stores, Inc. (NASDAQ:ROST) while raising its price target to $154.00 from $141.00 on Wednesday. The firm cited potential for accelerated traffic and comparable store sales growth following a meeting with the company’s executive team. According to InvestingPro data, Ross Stores boasts a perfect Piotroski Score of 9, indicating strong financial health, and maintains a solid market capitalization of $43.65 billion.
Ross Stores is implementing a new strategy focused on marketing and store experience improvements. The retailer plans to launch initial marketing initiatives in July/August and aims to refresh its entire store chain by the end of fiscal year 2026, which management believes could drive same-store sales growth exceeding 3-4% over time. The company’s strong financial position is evident in its metrics, with InvestingPro analysis showing liquid assets exceeding short-term obligations and moderate debt levels. Get access to 10+ additional exclusive ProTips and comprehensive analysis through InvestingPro’s detailed Research Report.
JPMorgan noted that Ross Stores showed sequential comparable sales improvement exiting the first quarter, particularly in March and April. The company’s historical pattern suggests a potential 300 basis point two-year stack acceleration relative to the first quarter, supporting what the firm called a "healthy" second-quarter guidance of up to 3% growth.
The investment bank projects potential fiscal year 2025 earnings per share of $6.45, exceeding the Street consensus. JPMorgan expects Ross Stores to restore its previously withdrawn guidance during the second-quarter earnings report, noting that the guidance was temporarily pulled due to tariff policy changes announced just before the first-quarter results. The company currently trades at a P/E ratio of 21.54, which InvestingPro analysts note is relatively high compared to its near-term earnings growth potential.
Ross Stores can achieve annual operating margin expansion at 3-4% comparable sales growth, according to JPMorgan’s analysis, with each percentage point of sales outperformance driving 10-15 basis points of incremental flow-through. The firm sees a path to over $7 in earnings per share for fiscal year 2026, compared to Street expectations of $6.76.
In other recent news, Ross Stores, Inc. has reported its first-quarter earnings, with earnings per share (EPS) reaching $1.47, slightly surpassing the consensus estimate of $1.44. Despite this performance, the company faces challenges related to tariffs and inventory management, leading to the withdrawal of its 2025 guidance. Analysts from UBS have maintained a Neutral rating on Ross Stores, citing a balanced potential for growth and challenges, while Evercore ISI has cut its price target from $170 to $160, maintaining an Outperform rating. TD Cowen has also adjusted its price target to $161 from $165, retaining a Buy rating, and noted pressures on merchandise margins due to tariff impacts.
Bernstein analysts have reiterated a Market Perform rating with a $147 price target, highlighting the significant headwind on gross margins from tariffs. Jefferies has reduced its price target to $135 from $145, maintaining a Hold rating, emphasizing Ross Stores’ reliance on Chinese imports and the resulting margin pressures. The company’s decision to withdraw full-year guidance reflects ongoing uncertainties in the retail sector. Analysts express varying levels of confidence in Ross Stores’ ability to navigate these challenges, with some preferring competitors like TJX Companies (NYSE:TJX). These developments underscore the complex landscape Ross Stores is navigating amid external economic pressures.
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