UPDATE: ISI Group Reiterates Buy Rating, Lowers PT on Ross Stores

In a report published Friday, ISI Group reiterated its Buy rating on Ross Stores (NASDAQ: ROST), but lowered its price target from $80.00 to $70.00.ISI Group noted, “ROST shares have come under significant pressure since September (-17% vs. the S&P and -13% vs. TJX) as investors begin to worry that ROST's solid mid- to high single-digit comp trend is moderating, perhaps partly at the hands of behemoth off-pricer TJX. However, given that meaningful divergences in performance between the two tend to be quite rare and short-lived (their quarterly comps are 92% correlated since 2007), we think worries may be premature and continue to view ROST as a core retail holding given today's uncertain macro environment, as well as ROST's unique ability to adapt to changing product trends, powerful branded value proposition, and long domestic growth runway. And while some may be concerned that management did not raise 4Q12 guidance as hoped (EPS $0.99-1.04, comps +1-2%), we remain convicted that EPS revisions are likely to be upward in the coming quarters as the company continues to post solid comps and square footage growth. We reiterate our Buy rating, but are lowering our price target to $70 from $80, reflecting 18x our 2013 EPS estimate of $3.90.”Ross Stores closed on Thursday at $54.21.