S&P 500   4,967.23
DOW   37,986.40
QQQ   414.65
How major US stock indexes fared Friday, 4/19/2024
American Express profits jump 34%, helped by jump in new customers, higher spending
American Express, Fifth Third rise; Netflix, PPG Industries fall, Friday, 4/19/2024
Intuitive Surgical Stock Can Trend Much Higher This Year 
3 Magnificent Seven Stocks Outperforming the Rest
Bargain Hunting: 3 Stocks With RSIs That Scream Oversold
Closing prices for crude oil, gold and other commodities
S&P 500   4,967.23
DOW   37,986.40
QQQ   414.65
How major US stock indexes fared Friday, 4/19/2024
American Express profits jump 34%, helped by jump in new customers, higher spending
American Express, Fifth Third rise; Netflix, PPG Industries fall, Friday, 4/19/2024
Intuitive Surgical Stock Can Trend Much Higher This Year 
3 Magnificent Seven Stocks Outperforming the Rest
Bargain Hunting: 3 Stocks With RSIs That Scream Oversold
Closing prices for crude oil, gold and other commodities
S&P 500   4,967.23
DOW   37,986.40
QQQ   414.65
How major US stock indexes fared Friday, 4/19/2024
American Express profits jump 34%, helped by jump in new customers, higher spending
American Express, Fifth Third rise; Netflix, PPG Industries fall, Friday, 4/19/2024
Intuitive Surgical Stock Can Trend Much Higher This Year 
3 Magnificent Seven Stocks Outperforming the Rest
Bargain Hunting: 3 Stocks With RSIs That Scream Oversold
Closing prices for crude oil, gold and other commodities
S&P 500   4,967.23
DOW   37,986.40
QQQ   414.65
How major US stock indexes fared Friday, 4/19/2024
American Express profits jump 34%, helped by jump in new customers, higher spending
American Express, Fifth Third rise; Netflix, PPG Industries fall, Friday, 4/19/2024
Intuitive Surgical Stock Can Trend Much Higher This Year 
3 Magnificent Seven Stocks Outperforming the Rest
Bargain Hunting: 3 Stocks With RSIs That Scream Oversold
Closing prices for crude oil, gold and other commodities

Can Tractor Supply Stock Surge Past Cup-With-Handle Buy Point?

Tractor Supply stock

Key Points

  • Tennessee-based Tractor Supply has been forming a potentially bullish cup-with-handle pattern, with a potential buy point near $230.
  • Analysts have a “moderate-buy” rating on the stock with a price target of $235.94, a potential upside of 10.88%.
  • The three-year revenue growth rate is 20%, and its three-year earnings growth rate is 29%. 
  • The company is primed for expansion in the next several years, with plans to open more stores nationwide. 
  • 5 stocks we like better than Tractor Supply

A classic cup-with-handle base is often a precursor to a stock’s run-up, and retailer Tractor Supply Company NASDAQ: TSCO is forming exactly that type of consolidation. 

The Tennessee-based company specializes in items for rural lifestyles, including hardware, supplies for livestock and domestic animals, lawn and garden items, fencing, mowers, and clothing.  

It’s the nation’s largest consumer farm retailer. As of September, it operates 2,027 Tractor Supply stores in 49 states and an e-commerce platform. In October, it acquired 81 stores from Orscheln Farm and Home. These will be rebranded to Tractor Supply by the end of next year. 

Tractor Supply also owns Petsense by Tractor Supply, a small-box pet specialty supply chain primarily in small and mid-size communities. It runs 180 Petsense stores in 23 states. 

MarketBeat analyst data for the company show a “moderate-buy” rating with a price target of $235.94 and a potential upside of 10.88%. 

Analysts Expect More Store Openings

Morningstar analyst Jaime Katz writes that she expects Tractor Supply to grow to around 3,000 stores by 2031, including Petsense. Over time, the company seems poised for growth, but what about the more immediate future?

Shares are up 14.41% in the past three months as the stock began etching the right side of a cup pattern in September. It rallied to an interim high of $229.81 on December 1 and has been forming a handle since then. The cup-with-handle formation offers an early entry point before a stock regains the high price of the cup base. 

As the handle formed, the stock declined 1.63% in the past month. You don’t want to see a handle decline of more than 10% or possibly 15% at the outset; that would mean the setup has broken down. 

Another good sign in the current handle is: Trading volume has been below normal in the past two weeks as the price declined. That’s ideal, as a heavy-volume selloff could indicate a lack of conviction among institutional buyers. Instead, this handle appears (so far) to be the result of some mild profit-taking. That can serve to shake out investors who lack conviction, setting the stage for more interested buyers to nab shares at a lower price. 

But does the current setup suggest more significant potential for gains than even the analysts see? 

Can Tractor Supply Ride Higher To Pass Cup-With-Handle Buy Point?

Shares were trading around $213.27 mid-session Thursday. That’s roughly 7% below a potential buy point near $230. If the stock clears that buy point without the handle sinking much further, then the stock may have the juice to rise more than 10.88%, primarily if a broad market rally also provides a lift. 


Sales, Earnings Continue To Increase

Do Tractor Supply’s fundamentals suggest the stock is ready to rally in the near-to-medium term?

The three-year revenue growth rate is 20%, and its three-year earnings growth rate is 29%. Revenue grew between 43% and 8% in the past eight quarters. One possible caveat: Revenue growth has been slowing from mid-double-digit rates to single-digit rates over the past six quarters. Make no mistake: Sales are still increasing at healthy year-over-year clips, but less frenetically than before. 

Earnings have been growing each year, as well. For the full year, Wall Street is eyeing a net income of $9.62 per share, an increase of 12%. Next year, that’s expected to grow another 9% to $10.47 per share. 

As with many stocks, Tractor Supply’s price action has tended to track the broader market. For example, shares advanced in five of the subsequent six sessions after the company’s most recent earnings report on October 20. However, as a nascent rally in the S&P 500 sputtered in early November, Tractor Supply also fell. Even its current handle formation is occurring in tandem with a moderate selloff in the S&P.

The cup-with-handle base, solid earnings and revenue growth, and future projections make the stock an attractive watchlist candidate. Investors should resist the temptation to jump into a promising stock too early, as their money may languish while other stocks rally sooner. 

Should you invest $1,000 in Tractor Supply right now?

Before you consider Tractor Supply, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Tractor Supply wasn't on the list.

While Tractor Supply currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Tractor Supply (TSCO)
4.3467 of 5 stars
$252.79+2.2%1.74%25.05Hold$241.65
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Kate Stalter

About Kate Stalter

  • stalterkate@gmail.com

Contributing Author

Retirement, Asset Allocation, and Tax Strategies

Experience

Kate Stalter has been a contributing writer for MarketBeat since 2021.

Additional Experience

Series 65-licensed investment advisor, financial advisor, Blue Marlin Advisors; investment columnist for Forbes, U.S. News & World Report

Areas of Expertise

Asset allocation, technical and fundamental analysis, retirement strategies, income generation, risk management, sector and industry analysis

Education

Bachelor of Arts, Saint Mary’s College, Notre Dame, Indiana; Master of Business Adminstration, Kellogg School of Management at Northwestern University

Past Experience

Founder, financial advisor for Better Money Decisions; editor, stock trading instructor for Investor’s Business Daily; columnist, podcast host, video host for MoneyShow.com; contributor for Morningstar magazine


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