Tractor Supply Revs Up on Forecast Hike and Bullish Signals

Key Points

• Tractor Supply Company's solid Q2 report and guidance are on track to sustain share price increases over time.
• The capital return is a factor, improving shareholder value by reducing the count and increasing the dividend annually.
• Bullish analyst trends will likely strengthen in the back half, supporting the uptrend in price action. 

Tractor Supply Company’s NASDAQ: TSCO FQ2 earnings report affirmed the outlook for long-term share price increases, as indicated by the recent stock split. Due to their quality, stocks that split tend to trend higher over time, outperforming the broader market.

Stock splits tend to happen with stocks whose prices have been trending higher to begin with. Uptrends are driven by business growth and improving shareholder value, so it only makes sense that the uptrend will continue afterward. 

Tractor Supply Company's uptrend is tied to store count growth, market penetration, and share gains as it leans into its Life Out Here strategy. Life Out Here serves underserved, less urbanized markets where the larger big-box stores are largely absent.

Like other retailers, the company faces hurdles in 2025, but is navigating the environment effectively, generating ample cash flow to sustain its growth trajectory, maintain a healthy balance sheet, and return capital. 

Tractor Supply Company Capital Returns Drive Share Price Action

Capital return is a critical factor for this investment. TSCO stock is a buy-and-hold investment whose price action is supported by numerous factors, none of which tend to produce vigorous share price increases; rather, it exhibits steady share price growth over time.

They include steady, stable, profitable business growth, an attractive dividend with an annually increasing distribution, and share repurchases. The dividend is safe and reliable, accounting for 45% of the earnings outlook, and is on track for robust annual increases. The distribution growth rate isn’t robust but is sustainable in the mid-to-low single-digit range and outpacing inflation.

The share repurchases are significant. The company tempered its outlook for buybacks, reducing the annual forecast slightly in mid-July 2025, but it remains on track to purchase up to $375 million, a sustainable pace.

The full-year forecast is worth approximately 1.1% of the pre-release market closing market cap, a solid pace but slower than the 1.6% decline posted for the June quarter. 

Bullish TSCO Analyst Trends Will Continue in the Back Half of 2025

Tractor Supply Company’s analyst trends were bullish leading into the release and are likely to continue strongly in the back half.

They included numerous price target increases, leading to the high-end range, aiding a 15% split-adjusted YOY increase in MarketBeat’s reported consensus and providing lift for the market.

The consensus estimate lags in early Q3 but is rising, and the high-end range is leading to new highs. 

The company achieved 4.5% revenue growth, outperforming the market by 100 basis points. It maintained strong margins and updated its guidance. Executives expect revenue growth of 4% to 8%, a wide range but one whose midpoint is well above the 4.7% consensus.

Regarding earnings, the company also forecasted a wide range with a midpoint above the consensus. 

Tractor Supply Company Plows a New High: Higher Highs Expected

Following the release, the price action in TSCO was bullish, rising by more than 4% to a new high. The move reveals ample support within an eager market, with the trading set to hit its potential to continue higher.

The move to new highs broke the market out of a trading range worth approximately $13, which puts the base-case target in the $74.50 to $75 range. It could be reached this year. 

The longer-term outlook is also bullish. The company remains on track to expand its store count and improve comparable sales over time. 

The analyst consensus forecasts mid-to-high single-digit revenue growth and high-single-digit to low-double-digit earnings growth for the subsequent nine years. This puts TSCO at roughly 11.5x its earnings outlook and in deep value territory.