In the report published Wednesday, the analysts stated Tractor Supply's stock price will be under short-term pressure affected by its pre-announcement of SSS in the second quarter of this year turning negative, the second incident within the past three quarters.
They see a share price weakness as a buying opportunity, because the long-term investment outlook remains solid.
Tractor's management reduced its fiscal 2016 year guidance to a $3.35–3.40 range, down from $3.40–3.48 previously. "This guidance anticipates SSS for FY16 growing 2.5–3.5 percent compared to prior range of 3.5–5.0 percent. Notably, the high end of management's 2H16 EPS guidance of $1.74, accompanied by SSS of ~5.0 percent, is still $0.01 above where the consensus view was prior to today's preannouncement," wrote Raymond James.
The analysts lowered their 2Q2016 EPS estimate to $1.16 down from $1.28 and 2016 EPS to $3.39 down from $3.55. They kept the $110 price target unchanged, assuming a 27.8x multiple and 2017 EPS of $3.96.
At time of writing, Tractor Supply was down 3.91 percent on the day, trading at $91.45.
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