Bullish indicating open at $55-$60, IPO prices at $37
On Tuesday, UBS analysts reiterated their Neutral rating for Ross Stores, Inc. (NASDAQ: NASDAQ:ROST), maintaining a price target of $144.00. With a market capitalization of $46.8 billion and trailing twelve-month revenue of $21.3 billion, Ross Stores has established itself as a prominent player in specialty retail. The analysts expressed confidence in Ross Stores’ potential to outpace department store peers in terms of growth over the coming years.
The forecast by UBS estimates Ross Stores will achieve an approximate 4.5% compound annual growth rate in earnings per share over five years. According to InvestingPro, the company currently trades at a P/E ratio of 22.2x, which appears high relative to its near-term earnings growth potential. This growth outlook supports a price-to-earnings ratio of around 21 times, which aligns with market expectations, according to UBS.
Data from the UBS Quant Team indicates that Ross Stores remains a popular choice among investors. The company boasts a perfect Piotroski Score of 9, indicating strong financial health, with InvestingPro analysis revealing 10+ additional key insights available to subscribers. This popularity is expected to maintain the company’s fiscal year one price-to-earnings ratio at 23 times, preventing significant increases in the near term.
The analysts noted that while improved credit card data might lead to some expansion in the price-to-earnings ratio, potential increases in tariffs could cause a contraction. As a result, UBS maintains its Neutral rating on Ross Stores, viewing the potential for upside and downside as balanced.
Ross Stores continues to be a focus for investors, with UBS providing insights into the factors influencing its valuation and market position.
In other recent news, Ross Stores reported a strong first-quarter performance, with earnings per share (EPS) of $1.47, surpassing the forecast of $1.43. Revenue also exceeded expectations, reaching $5 billion compared to the anticipated $4.94 billion. Despite this positive outcome, Ross Stores withdrew its annual guidance due to macroeconomic uncertainties, including tariff impacts on its merchandise margins. Analysts from Evercore ISI and TD Cowen have adjusted their price targets for Ross Stores, with Evercore ISI reducing its target to $160 and TD Cowen to $161, both maintaining positive ratings on the stock. Jefferies, however, lowered its price target to $135, reflecting concerns over the company’s reliance on Chinese imports, which account for more than 50% of its inventory. Bernstein maintained a Market Perform rating with a $147 target, citing the retailer’s significant exposure to tariffs as a headwind to gross margins. Ross Stores’ second-quarter outlook includes an EPS forecast between $1.40 and $1.55, with comparable store sales expected to be flat to up 3%. The company continues to face challenges related to inventory management and tariffs, which are expected to impact its financial performance in the coming quarters.
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