Ross Stores Stock Rating Rises; Beat Estimates

Ross Stores (ROST) reported better than expected first quarter earnings Thursday, and lifted its full-year earnings forecast. On Monday, the Relative Strength (RS) Rating for Ross Stores stock got a major upgrade from 77 to 83.

Market research shows that the market's biggest winners typically have an 80 or better RS Rating in the early stages of their moves. Ross Stores just earned membership in that exclusive club.

Ross Stores Stock Hanging In There

The tagline for Ross Stores is "Dress for Less." It's a saying that resonates well with today's value-conscious consumers. Denver-based Ross reported a 12% year-over-year increase in fiscal second quarter earnings, to $1.09 per share. Revenue grew 4% to $4.495 billion. Ross CEO Barbara Rentler said of full-year earnings, "We now project earnings per share for the 53 weeks ending Feb. 3, 2024 to be $4.77 to $4.99 compared to $4.38 for the 52 weeks ended Jan. 28, 2023." She noted that Ross will benefit from a 53-week fiscal year, giving it an added week of earnings.

However, in the earnings announcement CEO Rentler warned that consumers are anxious and that could impact future results. "There remains a high level of uncertainty in today's macroeconomic and geopolitical environments," Rentler said in the earnings news release. "In addition, prolonged inflationary pressures continue to negatively impact our low-to-moderate income customers' discretionary spend."

Ross Stores stock traded below its 50-day average from the beginning of February to May 15 when it topped it for the first time in 3-1/5 months. It continued to trade just above that key milestone Monday. It's also above its 200-day line after briefly dropping below it last week after earnings.

Watchlist candidate Ross Stores stock was virtually unchanged Monday afternoon. It's not currently offering a proper buying opportunity. See if the stock goes on to form a base that could ignite a fresh run.

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Peers In Top 5 Group

Ross Stores stock earns the No. 3 rank among its peers in the Retail-Apparel/Shoes/Accessories industry group. TJX Cos. (TJX) and Lululemon Athletica (LULU) are also among the group's highest-rated stocks.

When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.

IBD's proprietary RS Rating tracks technical performance by using a 1 (worst) to 99 (best) score that shows how a stock's price performance over the last 52 weeks matches up against other publicly traded companies.