Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Deutsche Bank lifts Ross Stores shares target on strong Q1 results

EditorEmilio Ghigini
Published 24/05/2024, 11:02
ROST
-

On Friday, Deutsche Bank raised its price target for Ross Stores, Inc. (NASDAQ:ROST) shares to $164 from $162, while maintaining a Buy rating on the stock. This adjustment follows Ross Stores' release of first-quarter results that surpassed expectations in terms of same-store sales (SSS) and profitability.

Ross Stores reported a solid first quarter, with performance metrics exceeding forecasts despite the challenging economic environment and pressure on low-income consumers. The company's management also provided an optimistic outlook for second-quarter SSS, indicating a potential acceleration in growth.

The retailer's focus on value is resonating well with customers, according to Deutsche Bank, and is expected to support sales growth throughout the remainder of the year. Additionally, there has been a noticeable sequential improvement in the performance of dd's DISCOUNTS, a subsidiary of Ross Stores.

Deutsche Bank also highlighted potential for further margin expansion, despite the investments Ross Stores has made to offer competitive pricing. Factors such as decreased domestic freight and fuel costs, along with the annualization of last year's incentive compensation, are anticipated to contribute positively to the company's margins.

The analyst concluded that these factors, combined with the strong quarterly performance and favorable outlook, indicate the likelihood of further positive earnings per share (EPS) revisions for Ross Stores in the future.

InvestingPro Insights

As Ross Stores, Inc. (NASDAQ:ROST) continues to navigate the retail landscape with strength, InvestingPro data provides a snapshot of the company's financial health and market position. With a market capitalization of $44.21 billion and a P/E ratio standing at 23.64, Ross Stores demonstrates a solid valuation in the market. Moreover, the company's PEG ratio, which measures the stock's value while taking into account expected earnings growth, is favorable at 0.88, suggesting that investors may find the stock's growth prospects appealing relative to its price.

InvestingPro Tips highlight Ross Stores as a consistent performer, with the company not only maintaining dividend payments for 31 consecutive years but also raising its dividend for the past three years. This indicates a reliable return for income-focused investors. Ross Stores' ability to operate with moderate debt and maintain liquid assets that exceed short-term obligations showcases the company's financial prudence and stability. Furthermore, analysts from InvestingPro predict that Ross Stores will be profitable this year, providing added confidence in the company's ability to sustain its positive trajectory.

For those interested in further analysis and additional InvestingPro Tips, there are 11 more tips available for Ross Stores at Investing.com/pro/ROST. To enhance your investment research, use the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

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

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.