In a report published Friday, Morgan Stanley analyst Kimberly C. Greenberger reiterated an Overweight rating and $81.00 price target on Ross Stores ROST.
In the report, Morgan Stanley noted, “ROST is a secular winner in the battle between moderate Department Stores and Off-Price Retail. Consumers increasingly prefer the Off-Price ‘better brands at lower prices' value proposition over moderate department stores' easier shopping experience. The Street believes JCP's return to traditional promotional strategies will pull traffic/sales from ROST. However, we think newer off-price shoppers find the channel value superior to promotional moderate brand offerings, which is reflected in our above consensus EPS forecast. The market fears P/E contraction, but we view this as low risk since ROSTis a no longer a cyclical story. We model an 11% 5-yr. EPS CAGR, supporting today's P/E and $81 PT in our view.”
Ross Stores closed on Thursday at $69.25.
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