S&P 500   3,901.36
DOW   31,261.90
QQQ   288.68
S&P 500   3,901.36
DOW   31,261.90
QQQ   288.68
S&P 500   3,901.36
DOW   31,261.90
QQQ   288.68
S&P 500   3,901.36
DOW   31,261.90
QQQ   288.68

Tractor Supply Company Reaps What It Sows 

Friday, April 22, 2022 | Thomas Hughes
Tractor Supply Company Reaps What It Sows 

Slowing Growth Caps Gains In Tractor Supply Company

Tractor Supply Company (NASDAQ: TSCO) is one of our favorite stories from the pandemic but it seems that, at long last, those tailwinds have ceased to blow. The company is still growing and is still forecasting growth but it has slowed from the high double-digits of last year to the low single-digits of this year. This fact may cap gains moving forward and keep the stock rangebound over the next quarter or so but there is an opportunity brewing as well. The company’s growth has been hindered by materials availability hindering new store openings, a situation that should be corrected over the next quarter or so. In that scenario, growth may reaccelerate later in the year and drive the stock up to a new high. 

Tractor Supply Company Delivers Bumper Crop Of Earnings 

Tractor Supply had a great quarter in which growth came in above the analyst consensus. The company reported $3.02 billion in net revenue for a gain of 8.2% over last year. The gain is driven by organic growth as well as new stores with comps up 5.2% over last year. The comp gain is on top of last year’s 38.6% increase and total revenue beat the Marketbeat.com consensus by 330 basis points. Internally, sales were driven by a 6.7% increase in ticket average offset by a 1.4% decline in ticket counts. Execs say sales were underpinned by a wide range of product categories including everyday items, consumables, and seasonal needs. eCommerce, a pillar of the Life Out Here strategy, grew by double digits for the 39th consecutive quarter. 

Moving down the report, the company experienced some margin compression but pricing efforts and internal efficiencies offset most of the decline. The gross margin shrank by 29 basis points to drive gross profit growth of 7.4%. The SG&A expense increased but fell 11 basis points to leave operating income at +6.0%. On the bottom line, the company reported $0.65 in GAAP EPS for a gain of 6.5% and all figures were better than expected. The GAAP EPS is $0.23 better than the consensus and up a dime from last year. 

Turning to the guidance, the company reiterated its previous guidance for revenue growth of 3% to 4.5% but we see upside risk in the numbers. Not only are home improvement and lifestyle trends still strong but the company says it is still on track to open 75 to 80 new stores. In our view, the company will come in above the high end of its range and top the current consensus estimate by a few hundred basis points by the end of the year. 

The Analysts Like "Life Out Here" 

At least 3 of the 19 analysts covering Tractor Supply Company have come out with commentary since the earnings report was released. All three maintained a Strong Buy/Overweight rating and raised their price target to a consensus of $255. The $255 target is about 18% above the current price action and compares well to the broader Marketbeat.com consensus of $237. The Marketbeat.com consensus has been trending higher and we see that trend continuing. 

The Technical Outlook: Tractor Supply Company Moves Lower Within Range 

Price action in Tractor Supply Company is range bound between $190 and $240 and looks like it will retest the low end before it retests the high end. The price action is moving lower in the wake of the earnings report and confirming resistance at the $217 level. The indicators are consistent with a move lower as well, but suggest this move is weak and already nearing oversold conditions. Assuming the market uses this dip as a buying opportunity, we see a chance for the stock to hit the $190 level but would view it, or a bounce from a higher level, as an attractive entry point for the stock. 

Tractor Supply Company Reaps What It Sows 

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 "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The 5 Stocks Here


Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Tractor Supply (TSCO)
3.4168 of 5 stars
Compare These Stocks  Add These Stocks to My Watchlist 


Premium Research Tools

MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau MarketBeat is rated as Great on TrustPilot

© American Consumer News, LLC dba MarketBeat® 2010-2022. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at [email protected] | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information | RSS Feeds

© 2022 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer. Fundamental company data provided by Zacks Investment Research.