ROST: Margin Strength And Expanding Footprint Will Drive Consistent Performance Ahead

Analysts have raised their fair value estimate for Ross Stores to $178.24 from $166.24 following strong third-quarter results and improved profit margins. Recent research cites broad-based sales strength and solid execution as support for the higher price target.

Analyst Commentary

Recent analyst updates have highlighted both upside and challenges for Ross Stores following its third-quarter performance and improved outlook. The latest round of research draws attention to the company's position within the off-price retail sector as well as the broader consumer spending environment.

• Bullish analysts have raised their price targets on Ross Stores, with some increases reaching as high as $200 per share. They cited strong results and continued momentum in the off-price retail space.
• Several firms pointed to robust comparable sales growth in the latest quarter, driven by broad-based demand and effective execution across categories.
• Margin expansion was repeatedly mentioned as a key positive for the business, contributing to both earnings upside and positive valuation revisions.
• Solid store growth and the ability to attract value-conscious shoppers are seen as ongoing drivers that support the company’s favorable positioning among peers.

• Some bearish analysts expressed caution over the company's core lower-income customer base, noting increased financial pressure and sensitivity to external policy shifts.
• Visibility into consistent improvement remains limited given a changing macroeconomic landscape. This could weigh on consumer confidence and discretionary spending.
• While the company outperformed this quarter, ongoing expense management and the potential for future volatility in consumer trends were cited as risks to sustained growth.

What's in the News

• Ross Stores, Inc. raised its earnings guidance for the full year 2025, projecting earnings per share in the range of $6.38 to $6.46, despite a negative impact from tariff-related costs. The company also increased its comparable store sales forecast for the 13 weeks ending January 31, 2026, to 3% to 4%. (Corporate Guidance: Raised)
• From August 3, 2025 to November 1, 2025, Ross Stores repurchased 1.7 million shares for $262 million, completing a total repurchase of 12.88 million shares or 3.9% of outstanding shares under the buyback program announced in March 2024. (Buyback Tranche Update)
• As part of continued business expansion, multiple new Ross Dress for Less stores and dd’s DISCOUNTS locations are opening nationwide. Each is expected to create 45 to 60 new jobs and will be accompanied by donations to local Boys & Girls Clubs or nonprofit organizations. (Business Expansions)
• Chief Financial Officer Adam Orvos is set to retire effective September 30, 2025. He will be succeeded by William Sheehan, the current Deputy CFO, who brings over three decades of experience in retail finance. (Executive Changes: CFO)

Valuation Changes

• Fair Value Estimate: Increased from $166.24 to $178.24, reflecting a modest upward revision based on recent performance.
• Discount Rate: Increased slightly from 8.43% to 8.44%, indicating a marginal increase in perceived risk or capital costs.
• Revenue Growth: Decreased from 5.26% to 5.14%, reflecting slightly tempered expectations for future top-line expansion.
• Net Profit Margin: Rose from 9.58% to 9.77%, indicating improved operational efficiency and profitability outlook.
• Future P/E Ratio: Declined from 27.43x to 26.89x, suggesting improved earnings prospects relative to current valuation levels.