economy
Jefferies says this discount retailer is a steady grower that could surge more than 40%
Jefferies upgraded the discount store chain on Thursday and said its stock could rise more than 40% from here.
TL;DR
- Jefferies upgraded Ollie's Bargain Outlet to 'buy' with a price target of $130, implying 42% upside.
- Ollie's is described as the leader in the closeout retail niche, a market that is growing.
- The company possesses a unique moat due to its ability to buy excess inventory at scale.
- Ollie's has more stores and national reach than competitors like Five Below, despite similar growth.
- The upgrade addresses concerns about peak margins, freight, and new-store performance, suggesting potential upside as cohorts mature.
- Ollie's operates approximately 645 stores and plans to grow to 1,300, with management seeing ample clearance goods available due to retail stress.