2024-01-29 11:21:01 ET
Summary
- Tractor Supply is one of the largest rural lifestyle retailers in the U.S. with a well-insulated niche customer base.
- The company has shown consistent financial growth and has room for expansion in Western States.
- Tractor Supply's Q4 earnings are expected to exceed guidance, even though analysts are estimating a 8.13% decrease in revenue.
Introduction
Tractor Supply ( TSCO ) is about to report earnings. Although this company's financials and performance steadily move in the right direction, Wall Street seems to be quite negative on the stock. According to BofA, it's the most underweight stock by hedge funds, and it's also the most shorted stock by hedge funds. And yet, this pessimism doesn't convince me to sell out of the stock and move on. In fact, I believe Tractor Supply is a one-of-a-kind retailer since it's the largest rural lifestyle retailer in the U.S. As such, it addresses, as the company itself explains in its Annual Report , "the needs of recreational farmers, ranchers, and all those who enjoy living in the rural lifestyle." These customers make up a well-insulated niche who usually have above-average income and regularly visit Tractor Supply's stores to pursue their lifestyle. As Hal Lawton, Tractor Supply's CEO, explained during the last earnings call , even though "consumers may be shifting from goods to services, they remain more committed to the out-here lifestyle and that (the company's) business is stickier than more discretionary components retail."...
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Tractor Supply Is Ready To Ride Higher On Earnings