Please ensure Javascript is enabled for purposes of website accessibility

Analysts Disagree on Ollie’s Bargain Outlet's Potential; Both See Its Price Rising

By Rich Duprey - May 26, 2020 at 8:34AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The deep discounter has had a phenomenal run throughout the COVID-19 pandemic.

Wall Street might not hold the same opinion of Ollie's Bargain Outlet (OLLI 2.52%), but one thing analysts can agree on is that its price is likely going higher.

Two investment firms issued ratings this morning on the deep discount retailer, which has seen its stock already triple in value from the low point it hit in mid-May. But one analyst downgraded Ollie's stock to neutral from outperform, while the other upgraded the stock to buy from hold. Both see its shares having the potential to rise further still.

Ollie's Bargain Outlet storefront

Image source: Ollie's Bargain Outlet.

Two sides of the same coin

Credit Suisse analyst Judah Frommer downgraded Ollie's on the basis that although stimulus spending may allow it to record positive comparable store sales in the second quarter, the impact of those checks is waning and he sees comps settling into a single-digit range over the long term. 

Thefly.com says the analyst told investors in a note that its current price of $85 per share made the risk-reward ratio more balanced. He set his price target for the retailer at $90, up from his prior $55.

Conversely, Craig-Hallum analyst Jeremy Hamblin upgraded the stock without comment and set his stock target price at $104, indicating 22% additional upside in the shares.

Hamblin had initiated coverage of Ollie's last September with a $94 target price because it was deemed one of the most attractive businesses in retail, poised to triple the number of stores it operated over the next decade. As the pandemic took hold, however, he downgraded the stock and lowered his price target to $59.

Now with the retailer performing admirably throughout the crisis, he is resuming his previous positive outlook.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Ollie's Bargain Outlet Holdings, Inc. Stock Quote
Ollie's Bargain Outlet Holdings, Inc.
OLLI
$60.32 (2.52%) $1.48
Credit Suisse Group AG Stock Quote
Credit Suisse Group AG
CS
$5.79 (-1.36%) $0.08

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
319%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.