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Industry data points to Tractor Supply stock rebound, DA Davidson highlights

EditorEmilio Ghigini
Published 10/21/2024, 06:33 AM
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On Monday, Tractor Supply Company (NASDAQ:TSCO) stock maintained a strong investment outlook as DA Davidson confirmed its Buy rating and $300.00 price target.

The endorsement comes after observing a positive shift in industry data, specifically within the North American Industry Classification System (NAICS) category #444, which saw growth following six consecutive quarters of decline.

The analyst from DA Davidson highlighted several factors contributing to the optimistic stance. Notably, there was an uptick in Point of Sale (P.O.S.) data, suggesting improved comparable store sales (comps). Additionally, the impact of deflation on the company's earnings is expected to be similar or less than in previous quarters.

The strength in sales of big-ticket items continued from the early part of the third quarter of 2024, and traffic trends appeared to be on an upswing.

Based on these positive indicators, DA Davidson has raised its estimates for Tractor Supply's performance. The firm's comp estimate has been adjusted upward to +1.5% from the +0.2% it had previously projected, positioning it ahead of the consensus. The analyst expressed confidence in the company's trajectory and upheld the $300 price target, which is predicated on a 26 times multiple of the projected 2025 earnings per share (EPS).

Tractor Supply Company's stock outlook is anchored by a combination of improving industry conditions and internal company metrics that signal growth. The company's ability to continue drawing customers and selling higher-priced items seems to play a critical role in this positive assessment. The maintained Buy rating and price target reflect an anticipation of sustained performance and profitability through the upcoming fiscal periods.

In other recent news, Tractor Supply Company has been the subject of various analysts' adjustments, with firms like Telsey Advisory Group, Baird, Evercore ISI, Piper Sandler, and Truist Securities revising their outlooks and price targets for the company. Telsey Advisory Group raised its price target from $300 to $335, maintaining an Outperform rating, citing the company's strong execution and strategic initiatives.

Meanwhile, Baird also maintained an Outperform rating with a $320 price target, highlighting the company's potential to meet or exceed third-quarter expectations. Evercore ISI, however, held Tractor Supply at an In Line rating, advising investors to wait for a more attractive entry point.

Tractor Supply's Q2 2024 earnings report revealed a 2.6% year-over-year increase in earnings per share to $3.93, though comparable store sales recorded a slight decrease of 0.5%. Following these results, the company updated its full-year 2024 earnings per share guidance to a range of $10.00-$10.40.

Piper Sandler, on the other hand, raised Tractor Supply's stock price target to $332, maintaining an Overweight rating. Truist Securities also increased the price target for Tractor Supply to $325, keeping a Buy rating on the stock.

Amid these developments, Tractor Supply continues to expand its operations, launching 21 new stores and three Petsense locations, and reporting double-digit growth in digital sales. These are the recent developments for Tractor Supply Company.

InvestingPro Insights

Tractor Supply Company's robust performance, as highlighted by DA Davidson's Buy rating, is further supported by real-time data from InvestingPro. The company's market capitalization stands at $32.1 billion, reflecting its significant presence in the retail sector.

InvestingPro Tips reveal that Tractor Supply has raised its dividend for 14 consecutive years, demonstrating a commitment to shareholder returns that aligns with its strong market position. This consistent dividend growth, coupled with the company's high return over the last year and decade, reinforces the positive outlook presented in the article.

The company's P/E ratio of 28.66 and its trading near its 52-week high corroborate DA Davidson's optimistic price target. These metrics suggest that investors are willing to pay a premium for Tractor Supply's shares, likely due to its growth prospects and strong market performance.

Interestingly, Tractor Supply's revenue for the last twelve months as of Q2 2024 was $14.71 billion, with a slight revenue growth of 1.48% in Q2 2024. This aligns with the article's mention of improved comparable store sales and positive industry data trends.

For investors seeking more comprehensive analysis, InvestingPro offers 13 additional tips for Tractor Supply Company, providing a deeper understanding of the company's financial health and market position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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