Pipe Jaffray Reiteates Overweight, $81 PT On Tractor Supply

In a note out today, Piper Jaffray reiterated an Overweight rating and $81 on Tractor Supply TSCO, implying decent upside from where the shares currently trade. "Based on state specific weather data that we have weighted according to TSCO's store base, we estimate the average temperature for TSCO stores were running 7.5 degrees F higher for the month of December. Despite guidance calling for warmer temperatures, we believe this somewhat extreme y/y change likely takes out the potential for meaningful upside in Q4 earnings and we are reducing our estimate from $0.89 to $0.85. That said, we point out that TSCO is not a holiday-driven business. In Q4 2006 it experienced weak sales from warmer weather only to have sales snap back strongly in Q1 2007 once the weather turned colder. Additionally, TSCO currently has a favorable inflation benefit in place for comp, and several gross margin drivers that should allow for EPS to come roughly in line with consensus," Piper said in the note. Shares of Tractor Supply are up slightly today.