Evercore ISI analysts adjusted their price target for Tractor Supply Company (NASDAQ:TSCO) from $245.00 to $240.00, while continuing to recommend an Outperform rating.

The analysts added Tractor Supply to Evercore ISI’s Tactical Underperform List, citing concerns about deflation and warmer-than-usual temperatures that lead to a more cautious short-term outlook. Tractor Supply is set to announce its fourth-quarter earnings on Thursday.

Long-term, the analysts view the company as a favorable pick within the Broadlines & Hardlines sector, citing its store growth potential, opportunities for market share gains, margin growth, and strong free cash flow of over $500 million.

However, the analysts believe that the consensus estimates for 2024 are too optimistic. They lowered their below-consensus forecasts for fourth-quarter comparable sales and 2024 EPS to -5% (compared to the street’s -3.9%) and $10, respectively, which is flat year-over-year and lower than the consensus EPS of $10.36.

In summary, while the analysts favor the stock in the longer term, they feel that current market expectations for 2024 are overly optimistic and that the stock price, given its high earnings multiple, could face more downside risk leading up to the earnings announcement.

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