The analyst day hosted this week by Tractor Supply executives elicited a good bit of reaction Thursday. By our count, the score was 2-1 for the bulls. Both Aram Rubinson at Nomura and Alan Rifkin at Barclays Capital see a clear path to further upside for Tractor Supply shares courtesy of sales growth, share buybacks and other factors. Said Rubinson: "The new store program is steady at 8% and comps are driven by multi-dimensional merchandising and a lot of unused space. We lift our target to $120 from $110, reflecting a consistent growth trajectory through 2015 (was 2014)."
On the flip side, Brent Rystrom at Feltl felt compelled to tap the brakes, downgrading his Tractor Supply recommendation to 'hold' from 'strong buy.' The stock's valuation, he said, has gotten a bit stretched. Tractor Supply shares (Ticker: TSCO) closed Thursday trading at $103.82 and have climbed almost 20 percent year to date.
Patrick Scholes at SunTrust Robinson Humphrey isn't buying the idea that Ryman Hospitality Properties will quickly close the valuation gap to its peers. This morning, he cut his rating on the owner of the Gaylord family of hotels to a rare 'reduce' from 'neutral,' citing a rich valuation and the challenges it faces in growing revenue per available room. His price target is $34; shares of Ryman (Ticker: RHP) opened down slightly this morning and are changing hands around $40.
Over at Feltl in Minneapolis, Brent Rystrom has lifted his price target for shares of Tractor Supply to $112 from $105 after the farm and ranch retailer reported a stronger-than-expected fourth quarter. As of this morning, the median price target for Tractor Supply stands at $107 while the stock (Ticker: TSCO) is changing hands just above $100.
A number of analysts covering Tractor Supply have raised their price targets for the specialty retailer's shares, which already are up more than 40 percent this year. Joan Storms at Wedbush Securities sees the stock climbing to $112 on the back of the powerful combination of strong execution and continued growth potential. And Brent Rystrom at Feltl now rates Tractor Supply a 'buy' and has lifted his target to $105 from $91.
Two researchers following Corrections Corp. of America have recently gone in different directions on the prison operator. At Barclays Capital, Manav Patnaik has lifted his price target to $33 from $30 and reiterated his 'overweight' rating. But over at First Analysis, Todd Van Fleet sees the steady 2012 climb of CCA stock (Ticker: CXW) as a reason to lighten up. He has lowered the stock to 'equalweight' from 'overweight.'
Analyst Richard Close at Avondale Partners has downgraded shares of HealthStream to 'market perform' from 'outperform' based on the stock's big runup. Close also has lifted his price target to $22 from $20 to account for those gains and says the execution of late by CEO Bobby Frist and his team has been "impeccable."
Long-term margin expansion opportunity remains, yet current investing in growth has led to muted bottom-line expansion and full valuation. We recommend continued exposure to the stock, considering the long-term growth opportunities in patient surveys, EHR software training, ICD-10 conversion, and simulation but would not initiate a new position at these levels.
Feltl & Co. researcher Brent Rystrom has lifted his price target on shares of Tractor Supply to $91 from $85. That leaves a little bit of upside for the booming stock (Ticker: TSCO), which has climbed 20 percent in the past three months. Goldman Sachs' Matt Fassler, who has long been cautious on Tractor Supply, also his lifted his target to $85 and says the company's growth forecast is "reasonable."
A few more analysts have weighed in on the prospects for Tractor Supply shares following the company's light 2012 guidance earlier this week. Barclays researcher Alan Rifkin has reiterated his 'overweight' rating and hiked his target to $90 from $80. Brent Rystrom at Feltl has followed suit, albeit a little more conservatively: He reiterated his 'buy' rating and lifted his target to $85 from $83. Tractor Supply shares (Ticker: TSCO) have regained the ground they lost this week and are again changing hands above $81 — less than 2 percent from their all-time highs.
Over at JPMorgan, analysts have begun covering shares of discount retail giant Dollar General with a 'neutral' rating and a price target of $45. That puts them among the more cautious researchers following Dollar General: Of the 20 other analysts tracking the company, only eight have 'hold' ratings. Dollar General (Ticker: DG) was off slightly late Friday morning at around $42.
A couple of analysts have already reacted to the second-quarter profit report of Tractor Supply, which topped expectations but came up a bit short on the top line. Along those conflicted lines, their recommendations differ, too: Feltl & Co.'s Brent Rystrom has lowered his rating to 'hold' from 'buy' and tweaked his price target to $67.95 from $69.75. But Joan Storms at Wedbush Securities is sticking to her 'outperform' rating and has actually raised her target to $75 from $73. Shares of Tractor Supply (Ticker: TSCO) are down 4 percent to roughly $67.80.
Community Health Systems' acquisition of a Scranton, Pa., hospital system is a good sign, says Avondale Partners analyst Kemp Dolliver, and shows that the company "isn't completely 'radioactive' as a buyer." But it's not enough, Dolliver added, for him to upgrade CHS shares from his 'market perform' rating: "We remain on the sidelines on the concerns overhanging the stock related to the government's investigation of the company's Medicare billing practices." CHS (Ticker: CYH) is up more than 2 percent this morning but down more than 25 percent so far this year.
The Trian offer is an implied endorsement of a favorable sector outlook. Despite the rising tide of retail prices, the lowest income customers will still shop at dollar stores and the sector will attract more trade down customers from grocery and drug stores. This should ensure DG's ability to grow EPS by 14%-20% each of the next three years.Montagna is sticking to his $34 price target for Dollar General, even though Peltz's valuation of Family Dollar would make the Goodlettsville-based chain worth up to $41 per share.