[ad_1]
Bank of America is more bullish on Tractor Supply Company following a solid earnings report. The bank double upgraded the farm supplies retailer to a buy rating from underperform, with analyst Robert Ohmes lifting his price target to $70 per share from $53. Based in a Nashville suburb, Tractor Supply shares have risen 11% this year, outperforming the S & P 500. Ohmes’ updated stock outlook is about 18% above where the stock closed Thursday afternoon. TSCO YTD mountain TSCO YTD chart As a catalyst, Ohmes pointed to Tractor Supply’s strong second-quarter results, which show a “return of momentum.” The company’s earnings and revenue both beat Wall Street expectations in the latest quarter. “Importantly, comps were driven by momentum in year-round categories, especially consumable, usable and edible (C.U.E.) products and sales were also positive in apparel, gift and décor and big-ticket items,” the analyst wrote. “Given the low elasticity (consumers don’t overspend in good times or pull back in difficult times), we think TSCO can also benefit from tariffs.” What’s more, customer traffic could benefit from multiple initiatives Tractor Supply is undertaking, including improved Project Fusion store remodels and partnerships with value-oriented private label and exclusive brands. “We see a higher multiple and a return to faster EPS growth of 10%+ as deflation headwinds abate and initiatives increase in 2H25 and into 2026,” Ohmes wrote in a 14-page report. “We believe TSCO has similarities to and compares favorably with leading Broadline retailers given TSCO’s high percent of consumables (40-45% of sales).” Another growth opportunity comes from Tractor Supply’s plans to open new stores in the northwest, where it is currently underrepresented. Ohmes also sees an opportunity for Tractor Supply’s delivery services initiative to eventually generate $1 billion in sales. “TSCO has an operational edge in rural U.S. and is reoptimizing trucks with a fleet of TSCO Delivery Drivers and utilizing a 145 hub stores 220 spoke stores rollout strategy (similar to auto parts distribution), with over 600 sales reps for larger customers (that spend $10k+ on a weekly basis),” Ohmes wrote. “Order sizes already ave. $400 and up to $40,000.”
[ad_2]
Source link
