tractor supply store

A handful of analysts following Tractor Supply are telling investors to be confident that the company’s growth during the COVID-19 pandemic can be sustained in 2021 and beyond.

Their comments and price target hikes in recent days have come on the heels of Tractor Supply executives releasing their first-quarter earnings report and raising their outlook for the Brentwood-based company's year. They also said that strong sales gains from the first quarter have carried over to the second quarter, expected to be the company's most difficult quarter based on last year's pop as the pandemic took hold.

Analyst Scot Ciccarelli raised RBC Capital’s Tractor Supply price target to $211 from $177. Ciccarelli noted sales trends as “already impressive” before they gained momentum in recent months and that, while they were buttressed by “temporary” boosts from inflation, weather and stimulus, core trends were still “extremely strong and consistent.”

DA Davidson’s Michael Baker pointed to new customer growth, repeat shopping rates, retention and loyalty card engagement as positives for Tractor. He has lifted his price target to $190 from $160.

Other analysts' target price increases since late last week:

  • Loop Capital, to $190 from $150
  • Barclays, to $185 from $155
  • Morgan Stanley, to $190 from $170
  • Baird, to $210 from $200

Tractor Supply's first-quarter sales jumped 42 percent to $2.79 billion, with same-store sales rising more than 38 percent. Net income for the first quarter of 2021 more than doubled to $181 million. The company opened 23 new locations and closed seven with two of the new opens and all seven of the closures being Petsense stores.

While increases in price targets would typically augur well for Tractor Supply investors, it is worth noting that many of the new targets roughly match the price point at which Tractor is currently trading. Its shares (Ticker: TSCO) opened and closed around $190 Monday; they're up about 40 percent over the past six months.

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