Are Wall Street Analysts Bullish on Ross Stores Stock?

Ross Stores, Inc. (ROST), based in Dublin, California, is an off-price retailer operating under the brands Ross Dress for Less and dd's DISCOUNTS. With a market cap of $46.6 billion, Ross Stores provides a range of designer apparel, accessories, footwear, and home fashions, all at discounted prices.

Shares of this leading off-price retailer have underperformed the broader market considerably over the past year. ROST has gained 14.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 32.3%. However, in 2024, ROST stock is up 2.9%, while the SPX is up 24.7% on a YTD basis.

Zooming in further, ROST has also lagged behind the SPDR S&P Retail ETF (XRT). The exchange-traded fund has gained about 27.4% over the past year and 9.9% in 2024.

Ross Stores' challenges stem from its reliance on physical retail locations, making it vulnerable to the growing shift toward online shopping. Additionally, rising competition among discount retailers has pressured its margins and market share.

Despite these hurdles, Ross Stores saw its stock rise 1.8% following the release of its Q2 earnings report on Aug. 23. The company reported $5.3 billion in total sales, a 7% year-over-year increase, alongside a 4% growth in comparable store sales, signaling stronger customer engagement and spending.

For the current fiscal year, ending in January 2025, analysts expect ROST’s EPS to grow 10.1% to $6.12 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.

Among the 21 analysts covering ROST stock, the consensus is a “Strong Buy.” That’s based on 17 “Strong Buy” ratings and four “Holds.”

This consensus is slightly less bullish than a month ago when 18 analysts recommended a “Strong Buy” for the stock.

On November 14, Wells Fargo & Company (WFC) lowered its price target for Ross Stores from $175 to $165. Despite the revision, the firm maintains an "Overweight" rating for the apparel retailer, indicating confidence in ROST's growth potential.

The mean price target of $173.74 represents a 22.1% premium to ROST’s current price levels. The Street-high price target of $190 suggests an upside potential of 33.5%.

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On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

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