Key Takeaways
- ROST reached a record high of $237.44, climbing approximately 2.65% during the session
- First quarter earnings per share of $2.02 exceeded analyst estimates of $1.71; total revenue reached $6B against projections of $5.6B
- Store traffic propelled a 17% jump in comparable sales
- Truist elevated its price projection to $290; UBS and Bernstein similarly increased their forecasts
- CNBC’s Jim Cramer highlighted CEO Jim Conroy’s leadership and endorsed the stock as a worthy investment
Ross Stores (ROST) achieved a record closing price of $237.44 during Wednesday’s trading session, gaining roughly 2.65%, as momentum builds following impressive first-quarter results and positive analyst commentary.
The discount retailer has surged approximately 78% during the past twelve months, advancing from its 52-week bottom of $124.49. The stock currently trades less than 1% below its new peak.
This surge follows a first-quarter performance that exceeded analyst projections across the board. Ross delivered earnings per share of $2.02, significantly surpassing the Street consensus of $1.71. Total revenue reached $6 billion, outpacing expectations of $5.6 billion.
The company’s comparable sales jumped 17%, powered primarily by increased customer traffic rather than higher transaction values. This type of organic growth is particularly impressive in today’s retail environment.
Wall Street Analysts Raise Forecasts
Truist Securities increased its price objective from $270 to $290 while maintaining its Buy recommendation. The firm emphasized that 17% comparable sales surge as a key factor behind the upgrade.
Bernstein SocGen Group elevated its target from $200 to $230, recognizing performance that exceeded already optimistic projections.
UBS increased its forecast to $232 from $227 while keeping a Neutral stance. The firm anticipates a 7.5% five-year compound annual growth rate for earnings and believes Ross will outperform traditional department store chains.
The stock currently commands a multiple of 29 times forward earnings estimates — up from 23x when CEO Jim Conroy assumed leadership. By comparison, competitor TJX trades at approximately 31x earnings.
InvestingPro notes the stock is trading above its calculated Fair Value, positioning it among the pricier options in today’s market. The platform assigns Ross a “GREAT” rating for financial health.
Mad Money Host Offers Endorsement
During Tuesday’s Mad Money broadcast, Jim Cramer offered specific praise for Conroy, stating the CEO is “doing an incredible job at Ross Stores.”
Cramer described a positive feedback loop: enhanced marketing drives foot traffic, improved merchandising increases conversion rates, and growing sales generate capital for additional investment in both areas. He described the off-price retail segment as “one of the few areas of retail that’s really working.”
While noting TJX as his preferred long-term holding, Cramer emphasized that Ross is “absolutely worth owning.”
Ross presently manages nearly 2,300 locations under its Ross Dress for Less and dd’s DISCOUNTS brands. Conroy has publicly stated his belief that 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 looks more justified when compared to industry peers, noting that sustained earnings growth could make today’s price appear reasonable retrospectively.
The company’s market capitalization now approaches $76 billion.
Truist’s $290 price objective represents the most bullish forecast on Wall Street following recent revisions, sitting approximately 22% above Wednesday’s record high.
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