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Here's How Tractor Supply (TSCO) is Poised Going Into 2021
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The year 2020 was pretty unusual owing to COVID-19 uncertainties, and ultimately it has almost reached the end. The pandemic has upended all aspects of life, and the stock market is no exception. Thus, investors are now looking for stocks that will pay them higher returns with impressive prospects. Leading retail farm and ranch store chain Tractor Supply Company (TSCO - Free Report) is one such stock which currently looks attractive for your portfolio.
The retailer is benefiting from its ONETractor Strategy, which is aimed at connecting store and online shopping. As online shopping is grabbing the limelight amid such trying times, the company has been accelerating its digital efforts. Strength in everyday merchandise, including consumable, usable and edible products, also seems encouraging.
Impressively, the Brentwood, TN-based company’s shares have surged 54.7% over the course of a year, outperforming the industry’s 12.3% growth. Meanwhile, the Zacks Rank #2 (Buy) stock has also outpaced the broader Retail-Wholesale sector and S&P 500 index’s rally of 40.1% and 19.9%, respectively. The Zacks Consensus Estimate for 2021 sales presently stands at $10.55 billion, suggesting year-over-year growth of 1.3%. A VGM Score of B and long-term earnings growth rate of 11.7% further support the positive view on the stock.
Let’s Dig Deeper
Given the changing consumer trends, Tractor Supply is focused on integrating its physical and digital operations to offer consumers a seamless shopping experience. Backed by the ONETractor initiative, the company continues to drive growth, build customer-centric engagement, offer suitable products and services, and reinforce core infrastructure capabilities. Moreover, the company is benefiting from the roll out of capabilities like stockyard in-store kiosk and mobile point-of-sale (PoS) in all of its stores, as well as enhancement of the Tractor Supply credit card offering, and investments in its supply chain.
In fact, the company’s omni-channel investments, including curbside pickup, same-day, next-day delivery, a re-launched website and new mobile app are commendable. These initiatives have also been contributing to digital sales growth. Notably, Buy Online Pickup in Store and Ship to Store facilities acted as key growth drivers, representing more than 80% of online orders during the third quarter of 2020. Apart from these, Tractor Supply’s newly launched mobile app as well as the Neighbor's Club loyalty program bode well. These well-chalked efforts are boosting traffic, which in turn is leading to new customer acquisitions. Going ahead, management expects to offer one-day delivery to 99% of its customers in the near term.
Management is also on track to build up on Tractor Supply’s Out Here lifestyle assortment and convenient shopping format to gain new customers and market share. The strategy is essentially based on five key pillars which includes customers, digitization, execution, team members as well as total shareholder return. Some of the key initiatives undertaken to support the strategy include boosting space productivity, enhancing omni-channel initiatives, evolution of Neighbor’s Club loyalty program as well as augmenting in-store merchandising execution. As part of the Life Out Here Strategy, the company also provided long-term financial growth targets for the upcoming three to five years.
Accordingly, management envisions achieving net sales growth in the bracket of 6-7%, while comparable-store sales are expected to grow between 4-5%. Further, operating margin is expected in the range of 9-9.5% and earnings per share are expected to grow in the bracket of 8-10%. Additionally, the company launched FAST, or the Field Activity Support Team, (“FAST”) and is implementing various technology and service enhancements across the enterprise.
L Brands , also a Zacks Rank #1 stock, has a long-term earnings growth rate of 13%.
Target (TGT - Free Report) has an expected long-term earnings growth rate of 8.5% and currently has a Zacks Rank #2.
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Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
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Here's How Tractor Supply (TSCO) is Poised Going Into 2021
The year 2020 was pretty unusual owing to COVID-19 uncertainties, and ultimately it has almost reached the end. The pandemic has upended all aspects of life, and the stock market is no exception. Thus, investors are now looking for stocks that will pay them higher returns with impressive prospects. Leading retail farm and ranch store chain Tractor Supply Company (TSCO - Free Report) is one such stock which currently looks attractive for your portfolio.
The retailer is benefiting from its ONETractor Strategy, which is aimed at connecting store and online shopping. As online shopping is grabbing the limelight amid such trying times, the company has been accelerating its digital efforts. Strength in everyday merchandise, including consumable, usable and edible products, also seems encouraging.
Impressively, the Brentwood, TN-based company’s shares have surged 54.7% over the course of a year, outperforming the industry’s 12.3% growth. Meanwhile, the Zacks Rank #2 (Buy) stock has also outpaced the broader Retail-Wholesale sector and S&P 500 index’s rally of 40.1% and 19.9%, respectively. The Zacks Consensus Estimate for 2021 sales presently stands at $10.55 billion, suggesting year-over-year growth of 1.3%. A VGM Score of B and long-term earnings growth rate of 11.7% further support the positive view on the stock.
Let’s Dig Deeper
Given the changing consumer trends, Tractor Supply is focused on integrating its physical and digital operations to offer consumers a seamless shopping experience. Backed by the ONETractor initiative, the company continues to drive growth, build customer-centric engagement, offer suitable products and services, and reinforce core infrastructure capabilities. Moreover, the company is benefiting from the roll out of capabilities like stockyard in-store kiosk and mobile point-of-sale (PoS) in all of its stores, as well as enhancement of the Tractor Supply credit card offering, and investments in its supply chain.
In fact, the company’s omni-channel investments, including curbside pickup, same-day, next-day delivery, a re-launched website and new mobile app are commendable. These initiatives have also been contributing to digital sales growth. Notably, Buy Online Pickup in Store and Ship to Store facilities acted as key growth drivers, representing more than 80% of online orders during the third quarter of 2020. Apart from these, Tractor Supply’s newly launched mobile app as well as the Neighbor's Club loyalty program bode well. These well-chalked efforts are boosting traffic, which in turn is leading to new customer acquisitions. Going ahead, management expects to offer one-day delivery to 99% of its customers in the near term.
Management is also on track to build up on Tractor Supply’s Out Here lifestyle assortment and convenient shopping format to gain new customers and market share. The strategy is essentially based on five key pillars which includes customers, digitization, execution, team members as well as total shareholder return. Some of the key initiatives undertaken to support the strategy include boosting space productivity, enhancing omni-channel initiatives, evolution of Neighbor’s Club loyalty program as well as augmenting in-store merchandising execution. As part of the Life Out Here Strategy, the company also provided long-term financial growth targets for the upcoming three to five years.
Accordingly, management envisions achieving net sales growth in the bracket of 6-7%, while comparable-store sales are expected to grow between 4-5%. Further, operating margin is expected in the range of 9-9.5% and earnings per share are expected to grow in the bracket of 8-10%. Additionally, the company launched FAST, or the Field Activity Support Team, (“FAST”) and is implementing various technology and service enhancements across the enterprise.
More Key Picks in Retail
Tapestry (TPR - Free Report) has a long-term earnings-growth rate of 10% and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
L Brands , also a Zacks Rank #1 stock, has a long-term earnings growth rate of 13%.
Target (TGT - Free Report) has an expected long-term earnings growth rate of 8.5% and currently has a Zacks Rank #2.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
Download Marijuana Moneymakers FREE >>