- Goldman Sachs analyst Kate McShane downgraded Ollie's Bargain Outlet Holdings Inc (NASDAQ:OLLI) to Sell from Neutral with a price target of $48, down from $77, implying a 5.7% downside.
- The analyst thinks opportunities for closeout inventory are likely to be more limited into 2022 as inventory challenges continue across retail.
- This could result in more competitive costs, especially as retailers potentially expand assortment in order to obtain inventory, McShane notes.
- She expects inventory uncertainty for Ollie's and believes the home category will likely underperform "given its more durable nature after elevated demand in 2020-2021."
- UBS analyst Mark Carden initiated coverage of Ollie's Bargain Outlet with a Neutral rating and $55 price target, suggesting an 8% upside.
- The analyst is positive about the company's deep discount offering and "treasure hunt experience," which allowed it to establish a "unique niche" appealing to a wide demographic and driving a "loyal" shopper base.
- Meanwhile, Carden warns that Ollie's is facing challenges that have disrupted its previously steady growth amid supply chain issues are inventory challenges that are likely to persist "well into FY22".
- Price Action: OLLI shares are trading higher by 0.87% at $50.91 on the last check Tuesday.
