Ollie's Bargain Outlet price target raised to $144 from $133 at RBC Capital

RBC Capital has raised its price target for Ollie's Bargain Outlet (OLLI) to $144 from $133, maintaining an Outperform rating, citing stronger business momentum and increased confidence in mid-teens EPS growth by 2026. RBC significantly elevated its Q3 comparable sales forecast to +3.5% and boosted FY25/26 adjusted EPS estimates, while OLLI recently reported a 2.6% comparable-store sales increase, surpassing analyst expectations. Despite the stock trading above its InvestingPro Fair Value at a 40.7x P/E, this revised outlook reflects a bullish stance on OLLI's ability to exceed market expectations, although broader analyst sentiment remains mixed but generally cautiously optimistic.

Analysis

RBC Capital has adopted a more bullish stance on Ollie’s Bargain Outlet (OLLI), raising its price target to $144.00 and maintaining an Outperform rating. This revision is underpinned by expectations of stronger business momentum, with RBC increasing its Q3 comparable sales growth forecast to +3.5%, significantly above the +1.3% consensus. The firm also projects OLLI's adjusted EPS will reach $4.49 in 2026, surpassing the consensus estimate of $4.29, and anticipates the company will signal confidence in achieving mid-teens EPS growth that year. This optimism is reflected in an expanded valuation multiple of 32x RBC's 2026 EPS estimate. This bullish outlook is supported by OLLI's recent performance, including a 2.6% increase in comparable-store sales that beat expectations and last-twelve-months revenue growth of 8.7%. However, the analyst community remains divided; while KeyBanc also raised its target to $145, Piper Sandler made a minor reduction to $123, and both Morgan Stanley and UBS hold Neutral/Equalweight ratings. Furthermore, the stock's current P/E ratio of 40.7x and an InvestingPro assessment suggest it may be trading above its intrinsic fair value, indicating that significant growth is already priced in by the market.

Key Decisions for Investors

• Given the strong upward revisions from RBC and KeyBanc, investors could view the current momentum and potential for a guidance raise as justification for maintaining or initiating long positions, referencing the new $144-$145 price targets.
• Investors should critically assess the stock's elevated 40.7x P/E ratio and conflicting neutral ratings from other firms, which suggest the optimistic growth outlook may already be fully priced in, posing a valuation risk.
• Closely monitor the upcoming quarterly report for confirmation of RBC's thesis, particularly whether comparable sales growth meets the aggressive +3.5% estimate and if management officially raises its 2025 guidance.