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

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

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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. 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.

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Stocks Mentioned

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

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