The broker Jefferies has initiated coverage of retailer Ollie’s Bargain Outlet (NASDAQ:OLLI) with a ‘buy’ rating and US$23 a share price target.
The shares are currently changing hands at just shy of US$20 each.
In a note to clients, analyst Daniel Binder told investors the stock has “appealing growth attributes”.
“Thus far, management has executed its low cost, low-price value strategy well,” he added.
“Shares could see upside if the company beats on seemingly conservative sales estimates in the second half.
“This may be achievable if it laps the introduction of coffee pods better than expected and sees some good closeout opportunities stemming from port disruptions earlier in the year.”
Ollie’s, which calls itself an “extreme value retailer”, listed on the NASDAQ growth exchange in July at US$16 a share and in that short time the stock has flown.
Jeffferies’ is one of a series of recent initiations that value the business at between US$20 and US$24 a share.