Nomura Securities Downgrades Ross Stores, Inc. (ROST) to Neutral; Shares Fully Valued; Prefer JWN
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Price: $65.20 --0%
Rating Summary:
12 Buy, 11 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 8 | New: 10
Rating Summary:
12 Buy, 11 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 8 | New: 10
Trade ROST Now!
Nomura Securities downgraded Ross Stores, Inc. (NASDAQ: ROST) from Buy to Neutral. PT $65.
Analyst, Paul Lejuez, said, "We think ROST is a great story – a resilient business model with msd-hsd square footage growth, and 21% ROIC. But with the stock above our TP, we believe the key merits of the ROST story are now more fully appreciated by the market, making the risk/reward more balanced. On our F13 numbers, the stock trades at a P/E of 16.7x (vs. its 3 yr avg of 14.8x) and an EBITDA multiple of 9.1x (vs. its avg of 7.5x). We believe additional multiple expansion is limited from here. We do not forecast an earnings miss or worry about execution issues at this point. This is not a head-for-the-exits call, but with years of outperformance within the retail landscape, we believe the easy money has been made and the risk/reward is more balanced. We prefer ROST to TJX Cos (NYSE: TJX), but would rather own Nordstrom (NYSE: JWN) trading at 5.8x F13E EBITDA and a 7.8% FCF yield (vs. ROST at 4.9%)."
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 $66.67 yesterday, with a 52 week range of $46.13-$95.24.
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Analyst, Paul Lejuez, said, "We think ROST is a great story – a resilient business model with msd-hsd square footage growth, and 21% ROIC. But with the stock above our TP, we believe the key merits of the ROST story are now more fully appreciated by the market, making the risk/reward more balanced. On our F13 numbers, the stock trades at a P/E of 16.7x (vs. its 3 yr avg of 14.8x) and an EBITDA multiple of 9.1x (vs. its avg of 7.5x). We believe additional multiple expansion is limited from here. We do not forecast an earnings miss or worry about execution issues at this point. This is not a head-for-the-exits call, but with years of outperformance within the retail landscape, we believe the easy money has been made and the risk/reward is more balanced. We prefer ROST to TJX Cos (NYSE: TJX), but would rather own Nordstrom (NYSE: JWN) trading at 5.8x F13E EBITDA and a 7.8% FCF yield (vs. ROST at 4.9%)."
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 $66.67 yesterday, with a 52 week range of $46.13-$95.24.
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