Tractor Supply Company (TSCO) 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.
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.