Market Overview

Morgan Stanley Thinks Ross Stores Was 'Stellar Across The Board'

Morgan Stanley Thinks Ross Stores Was 'Stellar Across The Board'

Ross Stores, Inc. (NASDAQ: ROST) reported Thursday its third quarter earnings, which exceeded expectations by a notable margin.

The Analyst

Morgan Stanley's Kimberly Greenberger maintains an Overweight rating on Ross Stores' stock with a price target boosted from $70 to $77.

The Thesis

Ross Stores' earnings report was "stellar across the board" and exceeded even the "most bullish expectations," Greenberger said in a note. For instance, the off-price retailer's 4 percent comp not only came in ahead of expectations of a 1-2 percent comp, but could prove to be "one of the best results in our coverage" on both a one-year and two-year basis. The company also benefited from both traffic and units per transaction, which is particularly impressive at a time when the retail environment as a whole is volatile.

Management's fourth quarter comp guidance of 2 to 3 percent is merely "icing on the cake" and could prove to be conservative given the strong momentum seen in the third quarter, the analyst said. Investors could expect to see "significantly more" earnings upside and the market will "continue to reward the stock."

Off-price retailers like Ross Stores continue to steal market share from department stores and specialty retailers and there are "no signs of the beat and raise story stopping in 4Q or 2018."

Price Action

Shares of Ross Stores were trading higher by more than 8 percent Friday morning at $71.50, which is above the stock's 52-week high of $69.81.

Related Links:

Amazon Can't Win The Battle Against Off-Price Retailers

TJX, Ross And Burlington Will Open The Same Number Of Stores Macy's, Sears And JC Penney Are Closing

Latest Ratings for ROST

Aug 2019ReiteratesOutperform
Aug 2019MaintainsOverweight
Aug 2019MaintainsBuy

View More Analyst Ratings for ROST
View the Latest Analyst Ratings

Posted-In: Department Stores Kimbergly Greenberger Morgan Stanley Off Price Retailers retail earningsAnalyst Color Price Target Analyst Ratings Best of Benzinga


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VTRMorgan StanleyMaintains73.0
STORMorgan StanleyMaintains39.0
STTMorgan StanleyMaintains58.0
SRCMorgan StanleyMaintains51.0
OMorgan StanleyMaintains75.0
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