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Investing.com - Wells Fargo (NYSE:WFC) raised its price target on Ross Stores, Inc. (NASDAQ:ROST) to $165 from $150 on Friday, while maintaining an Overweight rating on the stock. The retail giant, currently valued at $47.5 billion, has demonstrated strong financial health according to InvestingPro analysis, with a solid track record of maintaining dividend payments for 32 consecutive years.
The firm noted that momentum built in the second quarter after a shaky start to the fiscal year, with comparable sales accelerating and tariff pressures coming in below plan. This momentum is reflected in the company’s robust financial metrics, with annual revenue reaching $21.5 billion and maintaining healthy gross margins of 32.5%.
Wells Fargo highlighted that improvements are now much more visible, pointing to a rebound in the ladies business, an improved tariff mitigation outlook, and the continued build-out of branded merchandise.
The analyst report mentioned that Ross Stores provided "much-needed visibility" after pulling guidance three months ago, offering a "compelling reset" for the second half with a solid 2-3% comparable sales plan and conservative margins.
Wells Fargo suggested that Ross Stores may attract investors who "missed out" on TJX Companies (NYSE:TJX), noting that TJX is currently trading at its largest multiple spread ever compared to Ross at 6-7x.
In other recent news, Ross Stores Inc . announced its second-quarter earnings for 2025, revealing a strong performance in earnings per share (EPS). The company reported an EPS of $1.56, which exceeded the analyst forecast of $1.53. Despite this positive earnings result, Ross Stores’ revenue slightly fell short of expectations, recording $5.53 billion compared to the anticipated $5.54 billion. These developments highlight the company’s ability to manage earnings effectively, even as revenue projections were narrowly missed. Investors and analysts may find these results significant when considering the company’s financial health and operational efficiency. The announcement reflects ongoing trends in the retail sector, where earnings can sometimes outpace revenue growth. As always, analysts’ projections and company performance will continue to be closely monitored by investors.
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