Wells Fargo upgrades Ross Stores, calls stock one of the ‘best ways’ to play off-price retail

by | Oct 25, 2022 | Business

Ross Stores is one of the best ways investors can get in on the off-price retail trade, Wells Fargo said. Analyst Ike Boruchow upgraded the stock to overweight, saying in a note to clients Tuesday that he sees upside to Wall Street’s estimates ahead. “Enthusiasm with regard to the company’s margin management versus expectations, and comfort with top-line demand, yields enthusiasm,” he wrote, noting that he expects the company’s negative revision pattern to come to a close. Boruchow expects improving fundamentals across the off-price sector due in part to growing inventory availability as consumers trade down. He also sees freight to reemerge as a margin tailwind as spot rates normalize. The analyst reiterated the bank’s recent naming of Burlington Stores as a top pick, noting he’s refraining from upgrading TJX Companies despite stable margins and its decent stock performance (down 8.9% this year). “Simply put, we believe BURL and ROST are the best ways to play our bullish off-price thesis,” he wrote, calling both companies “better recovery stories.” Boruchow upped Wells Fargo’s price target on Ross Stores to $110 from $90 a share, suggesting the stock could rally 26% from Monday’s close. Shares are down about 24% this year. The stock gained roughly 2% in premarket trading. — CNBC’s Michael Bloom contributed reporting …

Article Attribution | Read More at Article Source

Share This