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ROST is expected to report earnings for its latest quarter on May 18, after the close.
“We believe the ‘bar’ for ROST’s 1Q report is a small beat and no change to FY23 guidance,” said the analysts. “However, we see downside risk to this expectation given ongoing macro pressures on ROST’s lower-income consumer.”
“We think a disappointing guide could lead to downward revisions to Street FY23 EPS estimates and cause sentiment to weaken,” they added. “The upside risk is ROST delivers a beat and raise report, but we see a lower chance of this scenario playing out.”
As a result, they believe this, plus the bullish sentiment, tilts the upside/downside skew negatively.
