CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We raise our 12-month price target by $14 to $138, based on 23.0x our FY 25 (Jan.) EPS estimate and slightly lower than the company’s 5-year average forward P/E multiple of 23.8x. We raise our FY 25 EPS estimate by $0.50 to $6.00 and initiate our FY 26 EPS estimate at $6.40. ROST posts normalized Q4 EPS of $1.82 vs. $1.31, $0.17 above consensus estimates on revenues of $6.02B vs. $5.21B and $208M above estimates. ROST said Q4 revenues and EPS benefitted by $308M and $0.20, respectively, due to the 53rd week in the FY. Q4 operating margin expanded by 165 bps Y/Y to 12.4% due to strong gains in same-store sales and lower freight costs. The company’s board approved a new $2.1B share repurchase program and raised the quarterly dividend by 10%. ROST guided for EPS between $5.64 and $5.89 with comparable store sales up 2% to 3%. Although we believe ROST is benefitting from a weak but stable U.S. consumer, we believe valuation is extended after a +35% run in shares since October and would wait for a better entry.