On Wednesday, Truist Securities updated its outlook on shares of Ollie's Bargain Outlet (NASDAQ:OLLI) Holdings Inc (NASDAQ: OLLI), increasing the price target to $121 from the previous $109 while maintaining a Buy rating on the stock. The adjustment follows the company's third-quarter results, which were described as solid despite several challenges faced during the period.
The company managed to navigate through various obstacles such as the shift in flyer schedules, the impact of competitor store closures, and hurricanes. Notably, Ollie's Bargain Outlet reaffirmed its full-year guidance, which was seen as a positive signal by the securities firm. Moreover, gross margins (GMs) recovered to above 40%, a move that is expected to address investor concerns that emerged after the second quarter's performance.
Truist Securities highlighted that while the closure of competitor stores could present a near-term headwind in the fourth quarter, it also opens up long-term opportunities for market share gains and sales growth. Ollie's Bargain Outlet has been actively acquiring locations emerging from bankruptcy, demonstrating an aggressive expansion strategy.
The report also emphasized the company's robust unit growth and solid operating performance. With consumers increasingly looking for value amid rising inflation, Ollie's Bargain Outlet's discount offerings appear to be gaining traction. The firm's analysis concluded with a reaffirmation of their Buy rating and an updated price target, reflecting confidence in the company's market position and future prospects.
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