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Investing.com - Morgan Stanley upgraded Tractor Supply Company (NASDAQ:TSCO), a $29.86 billion market cap retailer with a P/E ratio of 26.5x, from Underweight to Equalweight and raised its price target to $60.00 from $50.00. According to InvestingPro analysis, the company maintains a GOOD financial health score.
The upgrade comes as the rural lifestyle retailer moves past its investment cycle and shows signs of normalized comparable sales growth, with third-quarter 2025 comps increasing 3.9%, representing approximately 270 basis points acceleration on a two-year stack. InvestingPro data shows the company’s revenue grew by 2.96% in the last twelve months, with a notably low beta of 0.72 indicating stable stock performance.
Morgan Stanley cited balanced traffic and ticket growth as evidence that Tractor Supply’s top-line trajectory is sustainable, suggesting that the second half of 2025 and 2026 will show more normalized patterns in both comparable sales and earnings per share growth.
The investment bank’s $60 price target is based on approximately 23.5 times its 2027 EPS estimate of about $2.58, reflecting a view that risk and reward are now more balanced compared to its previous Underweight thesis.
Morgan Stanley identified the primary risk to its upgraded outlook as uncertainty around whether Tractor Supply’s EBIT margin will expand in 2026, noting that various factors affecting both gross margin and SG&A create "a wide array of outcomes."
In other recent news, Tractor Supply Company reported its third-quarter earnings for 2025, exceeding expectations with an earnings per share (EPS) of $0.49, slightly above the forecasted $0.48. The company’s revenue for the quarter was in line with projections at $3.72 billion, representing a 7.2% increase from the previous year. Additionally, Tractor Supply noted a significant 3.9% rise in comparable store sales. Despite these positive financial results, the company’s stock experienced a decline in pre-market trading. These recent developments highlight the company’s performance metrics, which are crucial for investors to consider.
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