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Tractor Supply Hits 52-Week High

Zacks Equity Research

The shares of Tractor Supply Company (TSCO) reached a new 52-week high of $127.62 on Monday, Sep 9 as the company is nearing its pre-announced stock split record date of Sep 18. Tractor Supply is expected to distribute the additional shares relating to the split on Sep 26 this year to shareholders of record date. This will bring Tractor Supply’s total shares outstanding to 139.6 million of a par value of 0.4 cents from 69.8 million of a par value of 0.8 cents as of Jul 27, 2013.

This farm and ranch store chain retailer eventually closed at $126.84 and generated a year-to-date return of nearly 39.0%. The company currently trades at a forward P/E of 28.3x, a 49.7% premium to the peer group average of 18.9x. The company’s premium valuation is justified, as its long-term forecasted earnings per share (EPS) growth rate of 17.4% is much higher than the peer group average of 14.5%.

Apart from the aforementioned reason, a track record of posting robust quarterly earnings, solid financial position, consistent focus on maximizing productivity and initiatives to expand its brand portfolio were the other factors that led to the stock’s strong price appreciation. The average volume of shares traded over the last 3 months was approximately 442K.

Tractor Supply’s earnings surprise history shows this Zacks Rank #2 (Buy) stock to have outperformed the Zacks Consensus Estimate in 20 out of the past 21 quarters, the only exception being first-quarter 2013 in which the company posted in-line earnings. The average surprise for the past 21 quarters is 13.4%.

Tractor Supply posted strong second-quarter 2013 results on the back of robust top-line performance and improved margins. It declared results on Jul 25, 2013, with earnings of $1.75 per share, increasing nearly 20.7% year over year and surpassing the Zacks Consensus Estimate of $1.71.

Tractor Supply’s total sales grew 12.7% to $1,455.8 million in the quarter from $1,291.9 million in the year-ago period, and beat the Zacks Consensus Estimate of $1,444.0 million. Additionally, comparable-store sales (comps) for the quarter climbed 7.2%.

Buoyed by better-than-expected quarterly results, management raised its earnings outlook for 2013. The company now projects earnings to come in between $4.36 and $4.44 per share, up from the previously forecasted range of $4.32–$4.40. The Zacks Consensus Estimate of $4.48 per share remains higher than the company’s guidance range.

Apart from Tractor Supply, companies such as Vodafone Group Public Limited Company (VOD), Citi Trends, Inc. (CTRN) and Digital Ally Inc. (DGLY) achieved new 52-week highs of $33.35, $17.72 and $15.23, respectively, on Sep 9, 2013.

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Read the Full Research Report on VOD

Read the Full Research Report on CTRN

Read the Full Research Report on DGLY

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