7 Reasons To Like Tractor Supply Courtesy Of Gordon Haskett

Gordon Haskett Research Advisors gave seven reasons to buy Tractor Supply Company (NASDAQ: TSCO) in a note this week. 

The Analyst

Gordon Haskett's Chuck Grom initiated coverage of Tractor Supply Company with an Accumulate rating and $86 price target.

The Thesis

Tractor Supply boasts seven company-specific initiatives that should help drive sales over time, Grom said in the initiation note:

• The Neighborhood Club loyalty program is just over one year old and has already attracted over 8 million customers, which should rise to 10 million by the end of the year.
• Tractor Supply is rolling out its Stockyard Kiosks from 200 at the start of 2018 to 800 by the end of the year. Encouragingly, the expansion should generate an 80-90-basis point lift on an investment of a few thousand dollars per location.
• The company relaunched its private label credit card with a focus on integrating its loyalty program to drive incremental sales.
• After 23 consecutive quarters of double-digit growth in e-commerce sales, Tractor Supply still has plenty of runway ahead, as online sales represent just 2.5 percent of total sales which is below "quasi-peers" such as Home Depot Inc (NYSE: HD) and Lowe's Companies, Inc. (NYSE: LOW). 
• A new store format, "One Tractor," is generating positive "early reads" from a top-line perspective and among employees and customers at five locations. 
• Tractor Supply continues to increase its product assortment through category expansions, new national brands and emerging category trends.
• The company has the resources to ramp new store openings through at least fiscal 2020.

Price Action

Tractor Supply shares were up 1.53 percent at $76.77 at the time of publication Wednesday afternoon.

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