Is Tractor Supply Company (TSCO) positioned for future growth?

Tractor Supply Company (NASDAQ: TSCO) stock fell -1.61% on Friday to $187.84 against a previous-day closing price of $190.92. With 1.02 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.25 million shares. During the session, the Specialty Retail company that operates in wider Consumer Cyclical sector, reached to the highest price of $191.66 whereas the lowest price it dropped to was $187.40. The 52-week range on TSCO shows that it touched its highest point at $241.54 and its lowest point at $166.49 during that stretch. It currently has a 1-year price target of $236.46. With its current market cap of 20.52 billion, TSCO has annualized dividend of $3.68 while the current yield stands at 1.96%. Beta for the stock currently stands at 0.92.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of TSCO was down-trending over the past week, with a drop of -1.56%, but this was down by -4.92% over a month. Three-month performance dropped to -11.66% while six-month performance fell -14.96%. The stock gained 1.30% in the past year, while it has lost -21.27% so far this year. A look at the trailing 12-month EPS for TSCO yields 9.06 with Next year EPS estimates of 10.44. For the next quarter, that number is 2.08. This implies an EPS growth rate of 35.00% for this year and 8.77% for next year. EPS is expected to grow by 10.45% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 21.40%.

Float and Shares Shorts:

At present, 112.53 million TSCO shares are outstanding with a float of 111.02 million shares on hand for trading. On Jul 14, 2022, short shares totaled 3.06 million, which was 2.74% higher than short shares on Jun 14, 2022. In addition to Mr. Harry A. Lawton III as the firm’s Pres, CEO & Director, Mr. Kurt D. Barton serves as its Exec. VP, CFO & Treasurer.

Institutional Ownership:

Through their ownership of 85.85% of TSCO’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 9.86% of TSCO, in contrast to 46.30% held by mutual funds. Shares owned by individuals account for 39.92%. As the largest shareholder in TSCO with 11.06% of the stake, The Vanguard Group, Inc. holds 12,373,427 shares worth 12,373,427. A second-largest stockholder of TSCO, BlackRock Fund Advisors, holds 6,576,137 shares, controlling over 5.88% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in TSCO, holding 4,857,300 shares or 4.34% stake. With a 2.95% stake in TSCO, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 3,300,460 shares are owned by the mutual fund manager. The Vanguard Mid Cap Index Fund, which owns about 2.30% of TSCO stock, is the second-largest Mutual Fund holder. It holds 2,575,841 shares valued at 499.33 million. Vanguard 500 Index Fund holds 2.21% of the stake in TSCO, owning 2,475,720 shares worth 479.92 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for TSCO since 32 analysts follow the stock currently. There are 17 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 12 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With TSCO analysts setting a high price target of $270.00 and a low target of $200.00, the average target price over the next 12 months is $235.30. Based on these targets, TSCO could surge 43.74% to reach the target high and rise by 6.47% to reach the target low. Reaching the average price target will result in a growth of 25.27% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. TSCO will report FY 2022 earnings on 01/26/2023. Analysts have provided yearly estimates in a range of $9.76 being high and $9.50 being low. For TSCO, this leads to a yearly average estimate of $9.59. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Tractor Supply Company surprised analysts by $0.02 when it reported $3.53 EPS against a consensus estimate of $3.51. The surprise factor in the prior quarter was $0.22. Based on analyst estimates, the high estimate for the next quarter is $2.17 and the low estimate is $1.93. The average estimate for the next quarter is thus $2.08.

Dividends & Yield:

In terms of dividends, TSCO has a current ratio of $3.68, which is $3.68 over the trailing 12-months, while a dividend of $1.5 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and TSCO currently yields $1.53. In the past year, TSCO’s dividend yield has been $1.53, but when looking at the stock over the past five years, its yield has been $1.27. Accordingly, TSCO has a current buyback yield of $3.95. This was $3.95 for the TTM, and it was $3.02 for the past five years.

Summary of Insider Activity:

Insiders traded TSCO stock several times over the past three months with 10 Buys and 3 Sells. In these transactions, 6,995 shares were bought while 12,350 shares were sold. The number of buy transactions has increased to 41 while that of sell transactions has risen to 69 over the past year. The total number of shares bought during that period was 155,886 while 142,990 shares were sold.

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