Ross Stores is lower as earnings jitters pick up
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Ross Stores (NASDAQ:ROST
-5.0%) traded lower on Tuesday as some analysts turned skittish over the retailer's earnings report next week.
UBS thinks Ross Stores (ROST) will deliver disappointing Q2 results and warns on FY22 guidance coming in below expectations.
Analyst Jay Sole said the likely natural follow through from that development will be sell-side consensus EPS estimates coming down and market sentiment crumbling, which could take the stock's P/E lower.
"We think the market doesn't fully appreciate how sales trends have slowed, how the buying environment remains weaker than normal, or how supply chain cost pressures remain high."
The options market is currently pricing in a 5.1% move after the earnings report drops on May 19 vs. a 3.7% historical average move. UBS said it sees good potential for more volatility over the event than the options market is pricing in.
The firm kept a Neutral rating on ROST and price target of $100.
See the consensus analyst estimates on ROST.