NEW YORK (TheStreet) -- Shares of Tractor Supply Co. (TSCO) are down -0.84% to $61.30 in early market trading after the company was downgraded to "market perform" from "outperform" at Avondale Partners LLC with a price target of $55, down from $67.
The firm said the change in its rating reflects overall market weakness and consumer pullback at retailers.
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Separately, TheStreet Ratings team rates TRACTOR SUPPLY CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate TRACTOR SUPPLY CO (TSCO) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, notable return on equity and good cash flow from operations. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TSCO's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 8.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- TRACTOR SUPPLY CO has improved earnings per share by 8.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TRACTOR SUPPLY CO increased its bottom line by earning $2.33 versus $1.90 in the prior year. This year, the market expects an improvement in earnings ($2.55 versus $2.33).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Specialty Retail industry average. The net income increased by 8.0% when compared to the same quarter one year prior, going from $123.58 million to $133.41 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Specialty Retail industry and the overall market, TRACTOR SUPPLY CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- Net operating cash flow has increased to $204.58 million or 29.38% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -3.20%.
- You can view the full analysis from the report here: TSCO Ratings Report