JPMorgan cuts Ollie’s Bargain Outlet stock target to $85 from $88


© Reuters.

On Wednesday, JPMorgan adjusted its price target for Ollie’s Bargain Outlet (NASDAQ:OLLI), a discount retail chain, reducing it to $85.00 from the stock previous target of $88.00. The firm maintained a Neutral rating on the stock.

The adjustment follows the company’s fourth-quarter earnings report, where Ollie’s reported an adjusted earnings per share (EPS) of $1.23, surpassing the consensus estimate of $1.16.

The retailer’s performance was buoyed by a 3.9% increase in same-store sales, exceeding the expected 3.5%. This marks Ollie’s seventh consecutive quarter of positive comparable store sales.

Moreover, the company’s gross margin expanded by 290 basis points, reaching 40.5%, which was above the anticipated 39.5%. Still, this was partially offset by a selling, general, and administrative (SG&A) expense rate of 24.1%, compared to the expected 23.7%.

Ollie’s Bargain Outlet’s second half of 2023 displayed a compound annual growth rate (CAGR) of 1.3% relative to 2019, aligning closely with the first half’s 1.4% performance. This consistency is in line with the company’s historical pre-pandemic growth pattern of 1-2%.

The company’s chief executive officer, John Swygert, characterized the fiscal year 2023 as a period of return to the robust financial performance and consistent execution that Ollie’s is known for.

Despite the positive elements in the quarterly report, JPMorgan’s price target reflects a cautious stance on the stock’s valuation. The maintained Neutral rating suggests that while the company’s recent performance has been strong, the firm advises a wait-and-see approach for potential investors.

The new stock price target of $85.00 provides a reference for the market on the value JPMorgan currently assigns to Ollie’s shares.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

antaranews

Leave a Comment