Tractor Supply Sell Reiterated – Analyst Blog
Posted on Tuesday, January 27th, 2009 | In Stocks to WatchOn January 22, Tractor Supply Co. (TSCO) pre-announced 4th quarter results. The company indicated that it will report sales of $800 million on EPS of $0.65-$0.67. Sales were in-line, but its EPS guidance was well below our previous estimate of $0.77.
The downside was due to Tractor Supply incorrectly accounting for its LIFO ["last in, first out"] provision, which negatively affected the company’s cost of goods sold and gross margin. Tractor Supply also restated its financials for the first 3 quarters of 2008, which reduced its EPS by a total of $0.20.
We maintain our Sell rating on TSCO shares. We continue to believe that the company will have a difficult time in 2009 as consumers cut back on spending. We believe the stock has downside risk to $25, or 10x our 2009 EPS estimate.
Read the full analyst report on TSCO.
“TSCO” Free Stock Analysis: Buy? Sell? Hold?
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