On Monday, Telsey Advisory Group maintained its Outperform rating on Tractor Supply Company (NASDAQ:TSCO), a $30.2 billion market cap retailer with a strong financial health score according to InvestingPro, with a steady price target of $335.00. The firm expressed solid confidence in the company's strategy for long-term, profitable growth following Tractor Supply's investor day and a tour of one of the new Project Fusion stores.
The company's strategic initiatives, dubbed 'Life Out Here 2030,' are expected to continue driving market share gains and dominance in rural America. These initiatives are projected to yield a long-term comparable store sales growth of 3%-5% and an earnings per share (EPS) growth of 8%-11%. The company has demonstrated its commitment to shareholder returns, maintaining and raising its dividend for 15 consecutive years.
According to Telsey, Tractor Supply is capitalizing on expanded strategic initiatives that are opening up additional business lines. New data suggests there is an opportunity to reach approximately 30-40 million people in existing trade areas who are not yet customers. This insight has led to an increase in the company's estimated total addressable market, rising from about $180 billion to around $225 billion. The competitive landscape is still seen as highly fragmented, which may present further opportunities for growth. For a deeper analysis of Tractor Supply's growth potential, InvestingPro subscribers can access comprehensive research reports with detailed metrics and expert insights.
The price target of $335 is based on a price-to-earnings (P/E) ratio of approximately 30 times Telsey's 2025 EPS estimate of $11.09 for Tractor Supply. Currently trading at a P/E of 27.5x and showing a strong year-to-date return of 33.5%, InvestingPro analysis suggests the stock is slightly overvalued relative to its Fair Value. The advisory group's outlook underscores the potential they see in the company's strategic direction and market positioning.
In other recent news, Tractor Supply Company has experienced notable developments. The company reported Q3 earnings that exceeded estimates and announced an acquisition of Allivet, an online pet pharmacy. Analysts from Benchmark, UBS, and Barclays (LON:BARC) have adjusted their stock price targets for Tractor Supply, with Benchmark maintaining a Buy rating, while UBS and Barclays maintain neutral ratings.
KeyBanc Capital Markets has also maintained a "Sector Weight" rating on Tractor Supply, acknowledging the company's potential for growth despite possible economic challenges. The company's initiatives include expanding direct sales and pet and animal health services.
Tractor Supply's management has adjusted its 2024 earnings guidance and projects net sales between $14.85 billion and $15 billion, and a diluted EPS between $10.10 and $10.40. Despite a slight dip in comparable-store sales, the company's Neighbor's Club membership has grown to over 37 million members, and there are plans to open 90 new stores in 2025.
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