Tractor Supply Company

Tractor Supply Company (TSCO - Analyst Report) just jumped beyond a key level of resistance at $45 after reporting strong second-quarter results in late July.

Company Description

Tractor Supply Company operates retail farm and ranch stores in the United States. The company was founded in 1938 and has a market cap of $1.69 billion.

Shares of TSCO have been on a nice rally for the last month as optimism has swung back into the market. The company helped its cause on July 22 when it reported solid second-quarter results that were ahead of expectations.

Second-Quarter Results

Revenue was up 5% from last year to $946.5 million. Earnings came in at $1.50, one penny better than the Zacks Consensus Estimate.

Tractor Supply has beat the consensus in each of the last 4 quarters by an average of 4 cents, or 34%.

Margin Expansion

The company's results were helped by a dramatic improvement in its gross margin, which jumped 10.5% to 31.9% of sales.

Estimates Jump

After word of the good quarter hit the street, analysts were quick to boost their earnings targets. The current year added 23 cents, climbing to $2.87 per share. The next-year estimate is projecting 9% earnings growth.

Valuation

Not only does Tractor Supply have nice sales and earnings growth, it is also reasonably priced, trading with a P/E multiple of 16X, a slight discount to the overall market.

The Chart

Shares of TSCO have been rallying since bottoming out with the overall market in early March. More recently, this stock jumped past a key level of resistance at the $45 mark. Take a look below.

Read the full analyst report on TSCO