Ross Stores stock rating upgraded by Jefferies on margin opportunity

Investing.com - Jefferies upgraded Ross Stores, Inc. (NASDAQ:ROST) from Hold to Buy on Wednesday, while raising its price target to $150.00 from $135.00. The stock, currently trading at $129.97, sits near its 52-week low of $122.36, despite the company’s strong market position with over $21 billion in annual revenue.

The research firm cited the retailer’s "wide valuation gap to peers" and significant margin opportunity as key factors behind the more bullish outlook.

Jefferies expects Ross Stores to outperform as comparable sales accelerate through year-end, supported by easy comparisons, improvements in ladies’ apparel, and refinement of better and best brands.

The firm projects operating profit margin to expand by approximately 170 basis points over the next three years, with additional room for valuation expansion. Want deeper insights? InvestingPro subscribers get access to 10+ additional ProTips and comprehensive financial analysis for Ross Stores.

Jefferies also noted that Ross Stores’ new CEO is only about six months into the role, suggesting more strategic initiatives may be revealed as the executive’s playbook continues to unfold. The company’s next earnings report is scheduled for August 14, 2025.

In other recent news, Ross Stores, Inc. has entered into a new $1.3 billion revolving credit facility, replacing its prior agreement. This new credit facility, effective until June 2030, offers Ross Stores additional financial flexibility with options to extend the term further. Meanwhile, JPMorgan has raised its price target for Ross Stores to $154, maintaining an Overweight rating, citing potential growth in store traffic and sales. UBS has reiterated its Neutral rating with a price target of $144, expressing confidence in Ross Stores’ growth potential compared to department store peers. Evercore ISI has adjusted its price target for Ross Stores to $160, noting a solid first-quarter earnings performance with EPS slightly above consensus estimates. TD Cowen also revised its price target to $161, maintaining a Buy rating, as Ross Stores faces merchandise margin pressures due to tariffs. Analysts highlight the company’s strategic initiatives and market positioning as factors influencing its valuation and future growth prospects.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.