UPDATE: Piper Jaffray Downgrades Tractor Supply Company to Neutral, Raises PT on Valuation

In a report published Thursday, Piper Jaffray analyst Peter J. Keith downgraded the rating on

from Overweight to Neutral, but raised the price target from $120.00 to $121.00. In the report, Piper Jaffray noted, “We are downgrading TSCO from Overweight to Neutral but slightly increasing our price target to $121 from $120. While we do not favor valuation downgrades, TSCO shares are +37% YTD and have drifted to 27x FTM P/E (a 5-year high valuation). At the same time EPS growth has slowed to the high teens over the last 12 months. As long-time supporters of the TSCO story, we continue to hold a high view of management, the company's unique niche, and its long-term growth potential. Looking forward, we see no risk to the slightly increased guidance range of $4.36-$4.44, but note upward revisions to the range now appear modest as Q2 (TSCO's ‘Christmas Quarter') only saw slight upside. Separately, we have slight concern that corn price declines y/y may minimize the historic inflation tailwind or turn it into a modest deflation headwind over the coming 12 months which could slightly pressure EPS growth.” Tractor Supply Company closed on Wednesday at $121.27.