Credit Suisse Downgrades Ollie's As 'Stock Looks Full'

  • Ollie's Bargain Outlet Holdings Inc OLLI shares have surged 32 percent since January 4.
  • Credit Suisse’s Edward J. Kelly downgraded the rating for the company from Outperform to Neutral, with a price target of $20.
  • Ollie’s stock valuation appears to be full after its recent outperformance, Kelly stated.

 

Analyst Edward Kelly mentioned that Ollie’s stock had outperformed the S&P retail index by more than 30 percent in 2016. He added that the stock valuation now appears full. The upside in shares have been driven by robust 3Q earnings and a positive Holiday update at the ICR conference in January.

Ollie’s IPO last year had raised the company’s profile with manufacturers and distributors looking to liquidate inventory, Kelly said. Ollie’s continues to have sound fundamentals, an experienced management team and a differentiated model which position it well for growth.

A differentiated operating model is expected to allow the company to post robust 4Q results in the current retail environment. “We are raising our comp estimates for Q4'15 and FY2016- 2017 given what we believe could be a period of top-line growth that comes in at the higher end of management's long-term comp guidance range,” the analyst wrote.

The EPS estimates for 2015 and 2016 have been raised from $0.69 to $0.70 and from $0.73 to $0.77, respectively.

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Posted In: Analyst ColorDowngradesAnalyst RatingsCredit SuisseEdward J. Kelly
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