UPDATE: BofA/Merrill Lynch Upgrades Ollie's Bargain Outlet (OLLI) to Buy

(updated to expand analyst comment)

BofA/Merrill Lynch analyst Elizabeth Suzuki upgraded Ollie's Bargain Outlet (NASDAQ: OLLI) from Underperform to Buy with a price target of $88.00 (from $68.00).

The analyst believes that bigger comps warrant a bigger multiple and believes material upside to the consensus expectations is likely to come in H2 2018.

She believes the street is not factoring in the material upside from the liquidation of Toys "R" Us. Suzuki points to a promotional flyer from OLII's on August 8th that showed the company had purchased nearly $200 million in toy inventory and be selling those products at up to 75% off through Christmas. She believes this incremental inventory can add between 600bps and 1500bps tailwind to comps and roughly 20-40% to EPS in the second half of this year.

For an analyst ratings summary and ratings history on Ollie's Bargain Outlet click here. For more ratings news on Ollie's Bargain Outlet click here.

Shares of Ollie's Bargain Outlet closed at $74.45 yesterday.

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