Analyst Alexandra Straton of Morgan Stanley maintained a Hold rating on Ross Stores (ROST – Research Report), reducing the price target to $130.00.
Alexandra Straton’s rating is based on a combination of factors that reflect both challenges and opportunities for Ross Stores. The company faces uncertainties regarding its ability to achieve margin recapture, with potential pressures from freight, inventory, and strategic investments. Additionally, recent changes in leadership add to the uncertainty, and ongoing challenges in the apparel sector, which is a significant part of Ross Stores’ product mix, further complicate the outlook.
Despite these challenges, Straton acknowledges that Ross Stores holds a defensive position in the off-price retail sector, which provides some valuation support. The company’s recent quarterly performance showed some regional strengths and category-specific successes, but overall, the results were mixed, with inventory growth and sales guidance raising concerns. These factors collectively justify the Hold rating, as they suggest a cautious approach while recognizing the company’s potential valuation floor.
In another report released on February 24, Telsey Advisory also maintained a Hold rating on the stock with a $175.00 price target.