Ross Stores rating raised to Buy at Gordon Haskett after earnings impress
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Gordon Haskett analyst Chuck Grom upgraded Ross Stores (NASDAQ:ROST) to âBuyâ after its third quarter earnings release was âdramatically better than expected,â in his view.
Shares of the California-based off-price retailer roared to a 13.89% gain shortly after Fridayâs market open after beating top and bottom line estimates for Q3 and raising full-year forecasts. CEO Barbara Rentler added that the company has worked diligently to control inventory and should benefit from âconsumersâ increased focus on valueâ into 2023.
Grom said the results suggest the company has âturned the cornerâ alongside the broader off-price retail space, which he believes offers ample opportunity. He advised clients âit makes sense to add more off-price retail exposureâ after the report.
âWe remain in the early innings of a trade-down which, when coupled with material freight expense relief and a healthy mark-on, paves the way for a very meaningful upward EPS revision cycle,â Grom concluded. âWe are taking our price target to $130, but do believe further upside exists as we progress into the first half of 2023.â
Grom upgraded TJX Companies (TJX) to Buy as well only about a week ago, citing many of the same dynamics for off-price retail.
Burlington Stores (BURL) also rocketed higher after Ross Stores' (ROST) +7.63% positive report.
Earnings are expected from Burlington on November 22. Read more on the expectations for the off-price retailer ahead of the print.