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Investing.com - UBS raised its price target on Ross Stores, Inc. (NASDAQ:ROST), a $47.5 billion specialty retailer, to $147.00 from $144.00 while maintaining a Neutral rating on the stock. According to InvestingPro, the company maintains strong financial health with a 32.5% gross profit margin.
The investment firm believes Ross Stores is capable of outgrowing department store peers over the next few years, forecasting approximately 4.5% five-year earnings per share compound annual growth rate. As an InvestingPro Tip highlights, the company is a prominent player in the Specialty Retail industry, with revenue growth of 1.92% in the last twelve months.
UBS notes this growth outlook justifies a 21x price-to-earnings ratio, and believes the market holds a similar view of the off-price retailer’s prospects.
The firm’s quant team data shows Ross Stores continues to be "very long-crowded," which UBS suggests will likely keep the company’s forward P/E ratio of approximately 24x from climbing much higher in the near term.
While improving credit card data could drive some P/E expansion, UBS cautions that a possible increase in tariffs in key sourcing countries like India could cause P/E contraction, resulting in what the firm sees as a balanced upside/downside outlook.
In other recent news, Ross Stores Inc . reported its second-quarter earnings for 2025, revealing a strong performance with earnings per share of $1.56, which exceeded the forecasted $1.53. However, the company’s revenue came in slightly below expectations at $5.53 billion, compared to the anticipated $5.54 billion. Wells Fargo (NYSE:WFC) responded by raising its price target for Ross Stores to $165 from $150, maintaining an Overweight rating, citing improved momentum in the second quarter and lower-than-expected tariff pressures. Meanwhile, Bernstein SocGen Group reiterated its Market Perform rating with a price target of $147, describing their outlook as "optimistically cautious" despite Ross Stores’ in-line second-quarter results. The firm noted a slightly more conservative stance on margins, even as management expressed optimism about current trends. These developments highlight the varied analyst perspectives on Ross Stores’ recent performance and future prospects.
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