Ollie's Bargain Outlet Gets Boost From RBC, Citing 'Increase' In Quality Of Deals

Although Ollie's Bargain Outlet Holdings Inc. OLLI reported another tough quarter, its fundamentals are poised to improve in the second half of the year and beyond, according to RBC Capital Markets.

The Ollie's Bargain Outlet Analyst: Steven Shemesh upgraded the rating for Ollie's Bargain Outlet from Sector Perform to Outperform, while raising the price target from $47 to $65.

The Ollie's Bargain Outlet Thesis: While supply chain disruptions are likely to continue, all three of the company’s distribution centers are now operating at 100% capacity, Shemesh said in a note.

“We remain confident that closeout deal availability is not an issue for OLLI, but believe the quality of deals is likely to increase over the coming months,” he added.

While reducing the earnings estimates for fiscal 2022 and 2023 from $2.21 to $1.93 and from $3.03 to $2.85, respectively, the analyst said that the company’s “consistently better fundamentals will result in meaningful multiple expansion.”

OLLI Price Action: Shares of Ollie's Bargain Outlet had risen by 2.98% to $54.97 at the time of publication Wednesday.

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Posted In: RBC Capital MarketsSteven ShemeshAnalyst ColorUpgradesPrice TargetAnalyst Ratings

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