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UBS Reiterates Neutral on Ross Stores (ROST) Following 1Q - PT to $57

May 20, 2016 9:15 AM EDT
Get Alerts ROST Hot Sheet
Price: $147.19 +1.81%

Rating Summary:
    27 Buy, 10 Hold, 2 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 6 | Down: 3 | New: 1
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UBS maintained a Neutral rating on Ross Stores, Inc. (NASDAQ: ROST), and cut the price target to $57.00 (from $60.00), following the company's 1Q earnings report. ROST reported EPS at $0.73, missing UBS estimates of $0.76 and in-line with the Street's $0.73.

Analyst Michael Binetti commented, "We were disheartened by ROST's +2% SSS in 1Q16, after Marmaxx reported +6% SSS in 1Q—given the high correlation of ROST & Marmaxx SSS historically (see page 5). We were surprised to see ROST transactions flat YOY given Marmaxx's +6% comp was traffic-driven (1Q comp metrics: ATV: up, driven by UPT; AUR: flat). We assumed that Marmaxx's comp acceleration was a significant positive for the value-driven offprice segment, especially after hearing that traffic was weak across dept stores. Recent comments from retail peers about favorable weather on the west coast (URBN noted a 1000bp better SSS trend on the west coast vs east coast lately) suggested upside to our 1Q SSS estimate for ROST—given 42% of its stores are in the western US (the highest in our coverage)."

For an analyst ratings summary and ratings history on Ross Stores, Inc. click here. For more ratings news on Ross Stores, Inc. click here.

Shares of Ross Stores, Inc. closed at $55.52 yesterday.



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