Ross Stores outperformed in 2022 but analysts think 2023 could be even better
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Ross Stores (NASDAQ:ROST) continues to be viewed as a retail sector standout amid the promotional holiday selling season and ongoing inflationary headwinds. Coming off a strong Q3 that saw the off-price retailer smash earnings estimates and navigate through inventory challenges much easier than peers, a positive consumer trade-down effect in play is anticipated to boost results for the holiday quarter
Of note, Ross Stores (ROST) is one of only five stocks in the specialty retailer sector with a 2022 gain. Looking ahead, analysts are confident the stock will repeat the outperformance in 2023.
Credit Suisse named ROST one of its top overall picks. Analyst Michael Binetti sees a positive setup for Ross Stores in 2023 including the most optimal buying environment for off-pricers in years with great bargains on high-quality branded inventories available to be snatched up. "In our view, the pandemic will permanently alter the dynamics in softlines categories with ecom growth decelerating and closure of dept stores/specialty retail stores being pulled forward, both of which pave way for off-pricers to gain market share in softlines." Catalysts seen for the stock include the potential for consumers to e trading down in declining macros and moderating freight rates. The firm has an Outperform rating on Ross Stores (ROST) and price target of $123.
Goldman Sachs analyst Brooke Roach also issued positive comments recently on ROST and reiterated a Buy rating. Meanwhile, Morgan Stanley said it thinks things will only get better from here given ROSTâs low Q4 bar, easier upcoming compares, improving inventory, and the potential trade down wave. The firm said it is bullish and reiterated an Overweight rating and price target of $127.
Wall Street analyst ratings scorecard on Ross Stores: 15 Buy-equivalent ratings, 8 Hold-equivalent ratings, and no Sell-equivalent ratings.
On Seeking Alpha, Marketplace author DMR Martins Research is a Ross Stores bull. "ROST is an equity hedge of sorts for the short term, but with upside potential over the long haul regardless of the macroeconomic landscape," noted the firm.