Ross Stores, Inc. (NASDAQ:ROST) — This large-cap, off-price retailer sells branded, in-season apparel and other items at over 1,300 stores in 33 states, D.C., and Guam. The company is on a Jan. 31 fiscal year, and Standard & Poor’s estimates that fiscal year 2017 earnings will reach $2.80, up from $2.51 in FY 2016, for the fifth-straight year of increased earnings and revenues.
Sales growth in January is forecast at 6.2%, and Ross plans to extend its retail base to more than 1,500 stores by the end of this year.
In addition to S&P’s FY 2017 estimated earnings increase, they project that Ross’s FY 2018 earnings per share will expand to $3.06. The new estimate was encouraged by the October quarter’s EPS, which was 5 cents above the analyst’s original estimate, who notes that ROST stock benefited from cost-conscious consumers and lean inventories tailored to local demand.
S&P has a four-star “buy” rating on ROST stock with a price objective of $72.
Technically, on Nov. 17 ROST stock broke through a triple top at $65.50 on high volume. The breakout left a gap from the break-point to $66.60, and a follow-up rally took the stock to a new all-time high at $69.81.
A consolidation is now taking place in a flag formation (bullish) with support at the breakout point at $65.50. The strength of this stock’s support is further enhanced by the 50-day moving average at $64.52.
Buy ROST stock at $66 with a trading objective of $75. Investors may consider this A-plus-rated stock for long-term participation in the retail apparel group.
