Ross Stores, Inc. (ROST) PT Raised to $154 at JPMorgan

JPMorgan analyst Matthew Boss raised the price target on Ross Stores, Inc. (NASDAQ: ROST) to $154.00 (from $141.00) while maintaining a Overweight rating.

The analyst comments "We hosted a NYC headquarters meeting with CEO Jim Conroy, COO Michael Hartshorn, CFO Adam Orvos, GVP of Investor & Media Relations Connie Kao, and VP of Investor & Media Relations Betty Chen and thought value add to share our key takeaways and multi-year model implications. With merchandising now restored to a steady-state baseline (following branded strategy actions fully implemented in FY24) - CEO Conroy outlined the “next leg” amplify > overhaul playbook with incremental opportunity cited across both marketing (July/August initial launch) and store experience (full chain refreshed by FY26-end) to accelerate traffic/comps (w/ more than +3-4% SSS “owed” over time) and new customer acquisition​. Near-term, management cited a potential “bullish case” to be made given the combination of sequential comp improvement exiting 1Q notably in March/April and historical +300bps 2-year stack acceleration relative to 1Q supporting a “healthy” 2Q guide (i.e., +3% at the high-end) with macro/external “potential” factors to consider including incremental tariff headlines and prolonged CA protests/civil unrest.

On bottom-line flow-through, COO Hartshorn confirmed annual operating margin expansion at +3-4% comp growth (even inclusive of CEO Conroy’s growth initiatives) pointing by our work to a 10%+ annual TSR profile with each point of comp outperformance above +3-4% same-store-sales driving 10-15bps historical incremental flow-through and multi-year merchandise margin recapture opportunity post FY24’s branded cycle reset (~80bps by our math) worth ~$0.45 of incremental EPS power by our model math. Model Implications: We see potential FY25 EPS of $6.45 (> Street/JPM at ~$6.20 and $5.95-$6.55 initial range) with upside potential to +3% comps in 2Q-4Q25 with FY25 guidance, which was clarified as “temporarily pulled not cut” given the timing of tariff policy changes 7 days prior to the print, likely to be restored on the 2Q print in our view. Remain Overweight raising our price target to $154 based on 24x with historical peer multiple spread applied to $7+ FY26 EPS power (> Street at $6.76) pointing to $170+ equity value opportunity."

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