On Tuesday, Piper Sandler increased the price target for Ollie's Bargain Outlet (NASDAQ:OLLI) shares to $107 from the previous target of $100, while maintaining an Overweight rating on the stock. This adjustment comes as the firm expresses a continued positive stance on the company's fundamentals, citing recent store checks that have reinforced their confidence.
The firm's analysis indicated that Ollie's Bargain Outlet persistently offers branded items at significant discounts compared to competitors such as Walmart (NYSE:WMT) and Amazon (NASDAQ:AMZN). The recent heat wave across the eastern half of the United States, where Ollie's predominantly has its stores, has created an opportune moment for selling high-ticket items like window AC units, which are expected to drive sales.
Moreover, the ongoing financial struggles of competitor Big Lots (NYSE:BIG) have intensified, with increased cash burn raising the likelihood of a bankruptcy. This potential development could lead to Big Lots closing stores and exiting leases, which Piper Sandler believes would provide a long-term benefit to Ollie's Bargain Outlet.
In light of these factors and a more confident outlook for Ollie's future performance, Piper Sandler has raised its price target. The new target represents a valuation of 28 times the estimated earnings per share (EPS) for the year 2025.
In other recent news, Ollie's Bargain Outlet has been experiencing strong financial performance, exceeding expectations, and attracting attention from multiple analyst firms. Loop Capital maintained a Buy rating for Ollie's, raising their price target to $110.
This adjustment was made following a review of Ollie's product offerings and financial performance, which included a 49% increase in adjusted earnings per share and an 11% rise in net sales.
JPMorgan (NYSE:JPM) also upgraded Ollie's stock from Neutral to Overweight, showing confidence in the company's financial prospects and market performance. The firm anticipates a robust growth rate of 2%, suggesting Ollie's is on track to outperform the previous year's second-quarter growth.
Moreover, Truist Securities, RBC (TSX:RY) Capital, and BofA Securities raised their stock price targets for Ollie's, citing the company's consistent performance and robust consumer appeal. These recent developments include Ollie's plans to open 50 new stores throughout the fiscal year and a raised outlook for total net sales projected between $2.257 billion and $2.277 billion.
In a significant move, Ollie's acquired eleven 99 Cents Only Stores in Texas, thereby enhancing its market presence. This acquisition was seen as a positive step for the company's future growth by various analyst firms.
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