On Wednesday, Jefferies demonstrated a positive stance on Ollie's Bargain Outlet (NASDAQ:OLLI), raising the price target for the company's shares to $110 from the previous $90. This adjustment comes in tandem with the firm's decision to maintain a Buy rating on the stock. The move follows Ollie's Bargain Outlet's first-quarter results, which surpassed expectations on both the top and bottom lines.
The company's robust quarterly performance was attributed to significant unit growth and consistent visibility of new store openings, along with strong comparable store sales (comps). In light of the impressive first quarter, Ollie's Bargain Outlet has also increased its full-year guidance.
Leadership at Ollie's Bargain Outlet has outlined an effective and strategic plan for succession, which has been well-received by the market. This plan, along with the company's solid operational execution, is expected to continue driving share gains and enhancing earnings potential.
Jefferies has expressed confidence in Ollie's Bargain Outlet's trajectory, citing the company's operation as "like a well-oiled machine." This assessment has led to the firm reiterating its Buy rating and adjusting its earnings per share (EPS) estimates upward, in line with the newly set price target of $110.
In other recent news, Ollie's Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) has announced significant leadership changes and promotions as part of its succession planning. John Swygert will transition to the role of Executive Chairman in early 2025, while Eric van der Valk has been promoted to President and is set to take over as CEO in early 2025. Robert Helm and Chris Zender have also been promoted, taking on additional responsibilities and joining the team respectively.
In recent developments, Ollie's has also acquired 11 store locations previously owned by 99 Cents Only Stores, contributing to the company's expansion plan. Analyst firms including Craig-Hallum, Truist Securities, and BofA Securities have maintained or upgraded their ratings on Ollie's stock, citing strong performance and stable growth prospects.
The company has reported a significant increase in revenues, reaching over $2 billion annually, and continues to focus on its growth trajectory. Furthermore, Ollie's has outlined plans to open 50 new stores within the fiscal year of 2024. The company has also seen a shift towards a more stable growth pattern, with analysts projecting a 10% compound annual growth rate in sales and earnings per share over the next three years.
InvestingPro Insights
Jefferies' optimistic outlook on Ollie's Bargain Outlet is mirrored by some of the metrics from InvestingPro. The company's P/E Ratio stands at a notable 30.61, reflecting a strong market valuation relative to its earnings. Adding to this, Ollie's Bargain Outlet showcases a PEG Ratio of 0.36 in the last twelve months as of Q4 2024, indicating that the stock may be trading at a low price relative to near-term earnings growth, which is an InvestingPro Tip worth considering.
Moreover, the company's robust revenue growth of 15.09% over the last twelve months, coupled with a high gross profit margin of 39.59%, underscores its operational efficiency. The market cap of $5.51 billion USD and a fair value estimate of $82.24 USD from InvestingPro further solidify the company's financial stability. Ollie's Bargain Outlet's liquidity is also a strong point, as it maintains liquid assets that exceed short-term obligations, an InvestingPro Tip that suggests a solid financial footing.
For investors eager to delve deeper into Ollie's Bargain Outlet's financials and future prospects, InvestingPro offers additional tips and insights. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and explore a total of 9 additional InvestingPro Tips available for OLLI at https://www.investing.com/pro/OLLI.
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