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Tractor Supply Co TSCO

Morningstar Rating
$235.38 −1.04 (0.44%)
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Company Report

Tractor Supply Continues to Blunt Consumer Spending Shifts and Advance Strategic Brand Investments

Tractor Supply is the largest consumer farm specialty retailer in the United States, surpassing $14.5 billion in sales in fiscal 2023. The firm has differentiated itself through its products and customer demographics, which provide underlying support to its brand intangible assets and wide economic moat. At the end of 2023, the store base had grown about 24% over the prior five-year period, to more than 2,400 locations, including 81 acquired locations from Orscheln and Petsense, driving sales and EPS compound annual growth rates over the past three years of 11% and 14%, respectively. We forecast that the firm will grow to over 3,200 stores by 2033 as it populates big-box centers in the western half of the U.S., with Petsense accounting for about 300 units.

Price vs Fair Value

TSCO is trading at a 10% premium.
Price
$236.42
Fair Value
$249.00
Uncertainty
Medium
1-Star Price
$259.30
5-Star Price
$688.60
Economic Moat
Mcyr
Capital Allocation
Qjtdwmhbtm

Bulls Say, Bears Say

Bulls

Tractor Supply has room for store growth, which should help it achieve high-single-digit EPS growth over the next decade (in line with the 8%-11% it expects). A quicker-than-expected rollout of side lot projects could lead to faster sales growth than we expect.

Bears

Competition is fierce throughout retail, and Tractor Supply will have to innovate to keep its market leadership position and ensure elevated brand relevance.

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News

Trading Information

Previous Close Price
$236.42
Day Range
$233.82236.81
52-Week Range
$185.00251.17
Bid/Ask
$216.00 / $239.50
Market Cap
$25.45 Bil
Volume/Avg
551,561 / 1.2 Mil

Key Statistics

Price/Earnings (Normalized)
23.44
Price/Sales
1.78
Dividend Yield (Trailing)
1.74%
Dividend Yield (Forward)
1.86%
Total Yield
4.09%

Company Profile

Tractor Supply is the largest operator of retail farm and ranch stores in the United States. The company targets recreational farmers and ranchers and has little exposure to commercial and industrial farm operations. Currently, the company operates 2,216 of its namesake banners in 49 states, including 81 Orscheln Farm and Home stores (rebranded as Tractor Supply), along with 198 Petsense by Tractor Supply stores. Stores are generally concentrated in rural communities, as opposed to urban and suburban areas. In fiscal 2022, revenue consisted primarily of livestock and pet (50%), hardware, tools, and truck (19%), and seasonal gift and toy (21%).
Sector
Consumer Cyclical
Industry
Specialty Retail
Stock Style Box
Mid Core
Total Number of Employees
49,000

Competitors

Valuation

Metric
TSCO
LOW
HD
Price/Earnings (Normalized)
23.4416.7722.99
Price/Book Value
11.84249.51
Price/Sales
1.781.492.35
Price/Cash Flow
17.0512.5918.41
Price/Earnings
TSCO
LOW
HD

Financial Strength

Metric
TSCO
LOW
HD
Quick Ratio
0.180.070.25
Current Ratio
1.521.211.30
Interest Coverage
33.577.9911.85
Quick Ratio
TSCO
LOW
HD

Profitability

Metric
TSCO
LOW
HD
Return on Assets (Normalized)
13.29%18.17%20.95%
Return on Equity (Normalized)
57.26%1,335.72%
Return on Invested Capital (Normalized)
18.07%36.37%34.03%
Return on Assets
TSCO
LOW
HD
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