Morgan Stanley analyst Alexandra Straton has maintained their neutral stance on ROST stock, giving a Hold rating yesterday.
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Alexandra Straton’s rating is based on a combination of factors that reflect both positive and cautious perspectives on Ross Stores. The company’s recent performance showed a notable improvement, with comparable sales outperforming some peers and a significant earnings per share beat. This was attributed to strategic changes in merchandising, customer service, and marketing. However, despite these positive developments, Straton remains cautious due to the company’s historical underperformance compared to its peers over the past two years and uncertainties about the sustainability of the recent sales uptick.
Straton’s Hold rating reflects a wait-and-see approach, as she seeks more consistent performance before becoming more optimistic about the stock. While the company’s guidance for the next quarter aligns with consensus and could potentially be exceeded, there are concerns about the potential for deceleration and operating margin trends. These factors contribute to the decision to maintain an Equal-weight view, as the analyst awaits further evidence of sustained improvement before revising the outlook.
In another report released yesterday, Bernstein also maintained a Hold rating on the stock with a $147.00 price target.