DA Davidson has reiterated its Buy recommendation on Tractor Supply Company (NASDAQ:TSCO), maintaining a price target of $60.00. At the time of the firms note, the stock was trading around $51.33, making the target roughly 17% higher than the prevailing market price. InvestingPro data referenced by analysts indicates the share price is currently trading above its calculated Fair Value.
The research note points out that 2025 represented the second consecutive year of tepid earnings growth for the rural lifestyle retailer. Performance was characterized by barely positive comparable store sales and slipping operating margins. Supporting that view, InvestingPro data shows 15 analysts have cut their earnings estimates for the upcoming period, and Tractor Supply is trading at a relatively elevated price-to-earnings multiple of 26.77 versus its near-term earnings growth.
Despite the recent softness, DA Davidson is constructive on the companys outlook for 2026. The firm anticipates an inflection point next year, with an improvement in comparable store sales and margin recovery. The analysts were careful to note that the projected improvement may not be as sizable as earlier modeled when the company offered initial 2026 guidance, but nevertheless characterized the anticipated change as "a step in the right direction."
According to DA Davidson, the expected recovery in 2026 should be supported by two primary factors: a normalization of commodity pricing and the early returns from a set of strategic initiatives undertaken by Tractor Supply. These drivers, the firm said, are likely to contribute positively to both comp trends and profit margins.
The research note arrives amid a wave of analyst revisions following Tractor Supplys weaker-than-expected fourth-quarter results. The company missed consensus forecasts on comparable store sales, margins, and earnings per share, prompting several firms to lower their price targets. Piper Sandler reduced its target to $59, citing the disappointing Q4 release. Mizuho trimmed its target to $58 and pointed to concerns about the rural economy and heightened promotional activity. Wolfe Research cut its target to $57, though it noted some improvement in quarter-to-date trends and projected January sales to be positive. Telsey Advisory Group set a new target of $63 while acknowledging continued market share gains despite the sales shortfall. Evercore ISI lowered its target to $60 after the Q4 earnings miss, highlighting weaker discretionary demand and elevated holiday promotions.
Even with those downward adjustments to price targets, most firms that revised their models maintained an Outperform rating on Tractor Supply stock.
Investors should weigh the mixed signals: persistent near-term softness in comps and margins and multiple analyst downgrades on one hand, and DA Davidsons expectation of a gradual recovery in 2026 backed by commodity normalization and strategic program paybacks on the other.