Update (9:42 a.m.): Updated with Monday market open information.
NEW YORK (TheStreet) -- RBC Capital Markets upgraded Ross Stores (ROST) to "outperform" from "sector perform" and set an $81 target price. The firm noted business has remained strong despite overall weakness in the apparel space.
The stock was up 1.08% to $73.76 at 9:41 a.m. on Monday.
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Separately, TheStreet Ratings team rates ROSS STORES INC as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ROSS STORES INC (ROST) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, ROST's share price has jumped by 29.55%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ROST should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Net operating cash flow has slightly increased to $340.78 million or 2.22% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -18.94%.
- ROSS STORES INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ROSS STORES INC increased its bottom line by earning $3.87 versus $3.53 in the prior year. This year, the market expects an improvement in earnings ($4.20 versus $3.87).
- ROST's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.35 is very weak and demonstrates a lack of ability to pay short-term obligations.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 7.2%. Since the same quarter one year prior, revenues slightly dropped by 0.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: ROST Ratings Report