Key Takeaways
- Ross Stores reached a record peak of $237.44, gaining approximately 2.65% in the session
- First quarter earnings per share of $2.02 exceeded analyst estimates of $1.71; sales totaled $6B against $5.6B projections
- Comparable store sales surged 17%, powered by increased customer traffic
- Truist Securities elevated its price objective to $290; UBS and Bernstein also increased their forecasts
- CNBC’s Jim Cramer commended CEO Jim Conroy’s leadership and endorsed the stock as a quality holding
Ross Stores (ROST) achieved a new all-time peak of $237.44 during Wednesday’s trading session, advancing roughly 2.65%, as momentum accelerates following exceptional first-quarter results and multiple analyst upgrades.
The discount retailer’s shares have surged nearly 78% during the trailing twelve months, climbing from a 52-week bottom of $124.49. The stock currently trades within 1% of its latest record.
The upward trajectory stems from a first-quarter performance that exceeded Wall Street projections. Ross delivered earnings per share of $2.02, substantially surpassing the consensus forecast of $1.71. Total revenue reached $6 billion, beating the anticipated $5.6 billion.
Comparable store sales jumped 17%, propelled by increased customer foot traffic rather than merely larger transaction values. This type of organic growth captures significant investor attention.
Wall Street Raises Price Objectives
Truist Securities elevated its price objective from $270 to $290 while maintaining its Buy recommendation. The firm highlighted the impressive 17% comparable sales growth as the primary catalyst.
Bernstein SocGen Group increased its target from $200 to $230, recognizing performance that exceeded already optimistic projections.
UBS boosted its target to $232 from $227 while maintaining a Neutral stance. The investment bank forecasts a 7.5% five-year earnings per share compound annual growth rate and anticipates Ross will outperform traditional department store competitors.
The stock currently trades at 29 times forward earnings estimates — higher than the 23x multiple when CEO Jim Conroy assumed leadership. By comparison, competitor TJX trades at approximately 31x earnings.
InvestingPro notes the stock is trading above its Fair Value calculation, positioning it among pricier market offerings currently. The platform assigns Ross a “GREAT” financial health rating.
Cramer’s Endorsement
During Tuesday’s Mad Money broadcast, Jim Cramer specifically praised Conroy, stating the CEO is “doing an incredible job at Ross Stores.”
Cramer described a virtuous cycle: enhanced marketing attracts shoppers, improved merchandising drives conversions, and stronger sales fuel additional investment in both areas. He characterized the off-price retail segment as “one of the few areas of retail that’s really working.”
While noting TJX remains his preferred long-term pick, Cramer declared Ross is “absolutely worth owning.”
Ross presently manages nearly 2,300 locations spanning its Ross Dress for Less and dd’s DISCOUNTS formats. Conroy has indicated he believes the company can ultimately expand to 3,600 stores — representing potential growth exceeding 50%.
Cramer conceded the valuation appears “a bit rich” in absolute terms but suggested it seems more justified when compared to industry peers, noting that sustained earnings outperformance could make current levels appear attractive retrospectively.
The company’s market capitalization now approaches approximately $76 billion.
Truist’s $290 price target stands as the Street’s most bullish outlook following recent revisions, positioned roughly 22% above Wednesday’s record closing level.
