Tractor Supply Company
TSCO
$33.70
+0.66%
Tractor Supply Company is the largest operator of retail farm and ranch stores in the United States, serving recreational farmers, ranchers, and rural homeowners through 2,463 namesake stores across 49 states plus 209 Petsense by Tractor Supply locations. Its merchandise mix spans livestock, equine and agriculture (roughly 27% of fiscal 2025 revenue), companion animal (24%), seasonal and recreation (24%), truck, tool and hardware (15%), and clothing, gift and décor (10%), giving it a differentiated, necessity-driven niche that insulates it from commercial and industrial farm cycles. The current investor narrative is dominated by a sharp de-rating: shares have fallen roughly 38% over the past year and about 34% year-to-date, driven by margin pressure and cautious guidance that triggered a double-digit single-day sell-off in late April 2026, even as management reaffirmed its long-term strategy. Bulls frame the pullback as an overreaction to transitory margin headwinds, pointing to a resilient rural consumer, aggressive store expansion, and a growing dividend, while bears question whether the company's growth algorithm can hold in a softer discretionary spending environment.…
TSCO
Tractor Supply Company
$33.70
Related headlines
Investment Opinion: Should I buy TSCO Today?
The synthesized recommendation is a Hold. The core thesis is that TSCO is a high-quality, defensive retailer with a compelling dividend and deep valuation de-rating, but near-term margin pressures and stagnant growth warrant caution until there is clear evidence of stabilization. The analyst consensus rating of 'buy' with an average target of $35.56 implies only 5.5% upside, suggesting limited near-term appreciation potential.
Supporting evidence includes a forward PE of 16.49x, which is a 33.6% compression from the trailing PE of 24.83x, implying expected earnings recovery. Revenue growth of 2.29% year-over-year is weak, but free cash flow of $307.0 million TTM and a dividend yield of 1.79% with a 44.5% payout ratio provide income support. The stock trades at a PS ratio of 1.75x, below its historical average, but the PEG ratio of 25.45 signals overvaluation relative to growth. The implied upside to the average analyst target is modest, and the wide target range ($28 to $42) reflects uncertainty.
Key risks include continued margin erosion, with operating margin already down to 11.67% from 13.01%, and high leverage with a debt-to-equity of 2.30x. The rating would upgrade to Buy if operating margin stabilizes above 12% and revenue growth accelerates above 4%, or downgrade to Sell if operating margin falls below 10% or if the dividend payout ratio exceeds 60%. Relative to its history and peers, the stock appears fairly valued to slightly undervalued, but the margin trajectory is the critical swing factor.
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TSCO 12-Month Price Forecast
The forward-looking view is neutral with medium confidence. TSCO is a defensive retailer with a strong dividend and deep valuation de-rating, but near-term margin pressures and stagnant growth limit upside. The base case (55% probability) targets $34-37, implying modest gains, while the bear case (20%) risks a retest of $28. The key factor is margin stabilization; if operating margin recovers above 12%, the stock could re-rate toward $42, but if it falls below 10%, downside to $28 is likely. We would upgrade to bullish if Q3 earnings show margin expansion, and downgrade to bearish if revenue growth turns negative.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Tractor Supply Company's 12-month outlook, with a consensus price target around $36.44 and implied upside of +8.1% versus the current price.
Average Target
$36.44
0 analysts
Implied Upside
+8.1%
vs. current price
Analyst Count
—
covering this stock
Price Range
$31 - $50
Analyst target range
Coverage is robust, with 27 analysts following TSCO. The consensus recommendation is "buy" with a recommendation mean of 2.1 (where 1.0 is a strong buy and 3.0 is a hold), and the average price target of $35.56 implies roughly +5.5% upside from the current price of $33.70. The distribution skews constructive — recent ratings from Argus Research (Buy), Goldman Sachs (Buy), Guggenheim (Buy), Baird (Outperform), Raymond James (Outperform), and Wells Fargo (Overweight) outweigh the Neutral stances from Piper Sandler, Mizuho, and UBS — but the modest implied upside and the presence of several hold-rated analysts suggest the consensus is cautiously bullish rather than conviction-driven, reflecting uncertainty about the margin trajectory.
The target range spans $28.00 to $42.00, a spread of $14.00, or roughly 41% of the average target — a wide dispersion that signals genuine disagreement about the company's earnings power. The high target of $42.00 (about +24.6% upside) likely assumes margin stabilization, successful store expansion, and multiple re-rating toward the historical average, while the low target of $28.00 (about -16.9% downside) prices in continued SG&A deleverage, weak discretionary demand, and further multiple compression toward the 52-week low. Notably, the low target sits essentially at the 52-week low of $28.36, suggesting even the bears see limited downside from here. The estimated EPS range for the coming year is tight ($2.533 to $2.636, a spread of just 4%), indicating analysts agree on near-term earnings but disagree on the multiple the market should pay — a classic setup for a stock that will be driven by sentiment and guidance rather than estimate revisions.
Bulls vs Bears: TSCO Investment Factors
The bear case currently has stronger evidence, primarily due to the severe margin compression and stagnant revenue growth that have driven a 38% decline over the past year. However, the bull case is supported by deep valuation de-rating, a resilient dividend, and a consensus analyst buy rating with a $35.56 average target. The single most important tension is whether the company can stabilize its operating margin, which fell to 11.67% in Q2 2026 from 13.01% a year earlier; if margins stabilize, the stock could re-rate significantly, but if they continue to erode, the low multiple could prove to be a value trap. The wide analyst target range ($28 to $42) reflects genuine disagreement about the company's earnings power, making this a high-stakes bet on margin recovery.
Bullish
- Deep valuation de-rating: The trailing PE has compressed from 39.32x in Q1 2025 to 24.83x today, and the PS ratio has collapsed from 8.20x to 1.75x, placing the stock near the bottom of its multi-year valuation band. This suggests the market has already priced in substantial pessimism, leaving room for multiple re-rating if margins stabilize.
- Analyst consensus remains bullish: 27 analysts cover TSCO with a consensus recommendation of 'buy' (mean 2.1), and the average price target of $35.56 implies +5.5% upside from $33.70. The high target of $42.00 offers +24.6% upside, and the low target of $28.00 sits essentially at the 52-week low, indicating limited downside according to even the bears.
- Free cash flow generation: TTM free cash flow is $307.0 million, and Q2 2026 alone generated $328.9 million of FCF on $562.0 million of operating cash flow. This cash generation supports $125.6 million in quarterly dividends and $135.6 million in buybacks, providing a solid capital return foundation.
- Defensive, necessity-driven business: TSCO operates 2,463 rural stores with a merchandise mix heavily weighted toward livestock, equine & agriculture (27%) and companion animal (24%), insulating it from discretionary and commercial farm cycles. This necessity-driven model supports a beta of just 0.514, roughly half the market's volatility.
Bearish
- Severe margin compression: Q2 2026 net margin fell to 7.94% from 9.69% a year ago, and operating margin dropped to 11.67% from 13.01%, driven by SG&A deleverage ($1.022 billion vs. $940 million). EBITDA margin also declined to 14.55% from 15.76%, showing profitability is deteriorating despite revenue growth.
- Stagnant revenue growth: Q2 2026 revenue grew just 2.29% year-over-year to $4.541 billion, barely keeping pace with inflation. This low-single-digit expansion means growth must come from new-store openings rather than productivity gains, limiting operating leverage.
- High leverage and weak liquidity: Debt-to-equity stands at 2.30x with total debt to capitalization at 71.3%, and the quick ratio is just 0.23, reflecting an inventory-heavy model. This leverage amplifies risk if cash generation falters or interest rates remain elevated.
- Broken technical trend: The stock is down 37.85% over the past year and 33.70% year-to-date, with a maximum drawdown of -51.95%. At $33.70, it sits just 18.8% above its 52-week low of $28.36 and 42.1% below its 52-week high, confirming a broken uptrend that may invite further selling.
TSCO Technical Analysis
TSCO is in a pronounced downtrend that has only recently begun to stabilize. The stock is down 37.85% over the past year and 33.70% year-to-date, with a maximum drawdown of -51.95% from its peak, and at $33.70 it sits just 18.8% above its 52-week low of $28.36 while trading 42.1% below its 52-week high of $58.21 — positioning it in the lower third of its annual range, which historically signals either deep value or an ongoing falling-knife dynamic. The magnitude of the decline (a loss of more than half its value at the trough) confirms this is a broken uptrend rather than a garden-variety pullback, and the burden of proof now rests on the bulls to establish a durable base.
Short-term momentum, however, is diverging constructively from the longer-term trend. While the 1-month change is -0.88% and the 6-month change is -25.16%, the 3-month change is +10.75%, meaning the stock has rallied meaningfully off its spring lows even as it stalls near-term. That 3-month relative strength versus SPY is +7.62 percentage points, a notable inflection after 1-year relative strength of -53.85 points, suggesting the worst of the selling pressure has abated. The recent price action — a grind from $29.58 in early July to $33.70 by October 9 — shows higher lows forming, though the 1-month stall and -3.00 point relative strength versus SPY over that window indicate the recovery has lost some urgency and needs a fresh catalyst.
Key technical levels are well defined. Support rests at the 52-week low of $28.36, with secondary support around the $29.50–$30.00 zone that has repeatedly attracted buyers since May; a breakdown below $28.36 would signal a resumption of the primary downtrend and likely invite momentum-driven selling. Resistance sits at the 52-week high of $58.21, but the more immediate hurdle is the $35.00–$36.50 area where the August rally stalled — a breakout above that band would confirm a higher-high structure and could open a path toward the mid-$40s. With a beta of just 0.514, TSCO is roughly half as volatile as the broader market, which cushions drawdowns but also means rallies tend to be slower and position sizing can be more aggressive relative to high-beta names.
Beta
0.51
0.51x market volatility
Max Drawdown
-51.9%
Largest decline past year
52-Week Range
$28-$58
Price range past year
Annual Return
-37.8%
Cumulative gain past year
| Period | TSCO Return | S&P 500 |
|---|---|---|
| 1m | -0.9% | +1.9% |
| 3m | +10.7% | +3.9% |
| 6m | -25.2% | +12.1% |
| 1y | -37.8% | +19.2% |
| ytd | -33.7% | +14.2% |
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TSCO Fundamental Analysis
Revenue growth has decelerated to a crawl. Fiscal Q2 2026 (quarter ended June 27, 2026) revenue was $4.541 billion, up just 2.29% year-over-year from $4.440 billion in Q2 2025, a marked slowdown from the prior-year quarter's growth and a continuation of a multi-quarter trend of low-single-digit expansion. Sequentially, revenue rose from $3.592 billion in Q1 2026 to $4.541 billion in Q2, reflecting normal seasonality, but the year-over-year comparison shows the top line is barely keeping pace with inflation. By segment, Livestock, Equine & Agriculture is the largest contributor at $1.453 billion, followed by Seasonal & Recreation at $1.181 billion and Companion Animal at $954 million, with Clothing, Gift & Décor the smallest at $318 million — the mix is defensively oriented, but without accelerating comps, growth must come from new-store openings rather than productivity gains.
Profitability remains solid but is compressing. Q2 2026 net income was $360.7 million on a 7.94% net margin, down from $430.0 million and a 9.69% net margin in Q2 2025 — a year-over-year earnings decline of roughly 16% despite the revenue increase. Gross margin in Q2 2026 was 34.17%, essentially flat versus 34.19% a year ago, but operating margin fell to 11.67% from 13.01%, and EBITDA dropped to $660.7 million (14.55% margin) from $699.9 million (15.76% margin), showing that SG&A deleverage — $1.022 billion in Q2 2026 versus $940 million a year earlier — is the primary culprit. The trailing net margin of 7.06% and operating margin of 9.45% remain respectable for specialty retail, but the direction of travel is negative, and the Q1 2026 quarter was even weaker with a 4.58% net margin and 6.50% operating margin, underscoring the seasonal and cost pressures the company faces.
Balance sheet leverage is the key risk. Debt-to-equity stands at 2.30x with a debt ratio of 53.8% of assets, and total debt to capitalization is 71.3% — high for a retailer, though typical of a company that leases most of its real estate and funds expansion with debt. Liquidity is adequate but not generous: the current ratio is 1.34 and the quick ratio is just 0.23, reflecting an inventory-heavy model. Free cash flow is the bright spot — TTM free cash flow is $307.0 million, Q2 2026 alone generated $328.9 million of FCF on $562.0 million of operating cash flow, and the company returned capital via $125.6 million of dividends and $135.6 million of buybacks in the quarter. However, ROE of 42.5% is flattered by the leveraged capital structure, and with capital expenditures running at $233.1 million in Q2, the company must sustain cash generation to service its debt and fund growth without external financing.
Quarterly Revenue
$4.5B
2026-06
Revenue YoY Growth
+2.3%
YoY Comparison
Gross Margin
34.2%
Latest Quarter
Free Cash Flow
$306980000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is TSCO Overvalued?
Because TSCO is profitable — Q2 2026 net income of $360.7 million and trailing EPS of $0.04 on a reported basis (with normalized annual EPS far higher, as reflected in the forward estimate of $2.585) — the PE ratio is the appropriate primary metric. The trailing PE is 24.83x while the forward PE is 16.49x, a 33.6% compression that implies the market expects a significant earnings recovery in the coming year, consistent with analyst estimates of $2.585 in EPS. The PEG ratio of 25.45, however, signals that on a growth-adjusted basis the stock is expensive relative to its expected earnings growth rate, a caution flag for a company growing revenue at just 2.3%.
Relative to the broader specialty retail sector, TSCO's valuation is mixed. Its PS ratio of 1.75x and EV/Sales of 1.51x are modest in absolute terms, but its EV/EBITDA of 16.82x and price-to-book of 10.55x sit at a premium to many brick-and-mortar peers, reflecting the market's recognition of its high ROE (42.5%) and defensive business model. The dividend yield of 1.79% with a payout ratio of 44.5% is attractive for income investors and provides a valuation floor. The premium embedded in the book multiple is justified only if margins stabilize; if operating margin continues to erode from the current 9.45%, the market is likely to compress that multiple further.
Historically, TSCO's valuation has de-rated sharply. Its PE ratio has fallen from 30.15x in Q4 2024 and 39.32x in Q1 2025 to 24.83x today, while its PS ratio has collapsed from 8.20x in Q1 2025 to 1.75x — a dramatic compression that places the stock near the bottom of its multi-year valuation band. The price-to-book ratio of 10.55x is also below the 12.5x–13.5x range seen through 2024. This suggests the market has already priced in substantial pessimism; if the company can stabilize margins and return to mid-single-digit earnings growth, the current multiple offers meaningful re-rating potential, but if fundamentals deteriorate further, the low multiple could prove to be a value trap.
PE
24.8x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 11x~39x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
16.8x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are significant. The company carries a debt-to-equity ratio of 2.30x and a total debt to capitalization of 71.3%, which is high for a retailer and amplifies vulnerability if cash flows decline. The quick ratio of just 0.23 highlights a reliance on inventory, and with operating margin falling to 11.67% in Q2 2026 from 13.01% a year ago, there is little room for error. Additionally, revenue growth of only 2.29% year-over-year means the company must rely on new store openings to drive growth, increasing execution risk.
Market and competitive risks are pronounced. The stock trades at a premium price-to-book of 10.55x and EV/EBITDA of 16.82x, which could compress further if margins do not stabilize. The PEG ratio of 25.45 suggests the market is pricing in unrealistic growth expectations, and with a beta of 0.514, the stock is less volatile than the market but still sensitive to sector rotation. Recent news highlights a sharp sell-off in April 2026 due to cautious guidance, and the stock remains 42.1% below its 52-week high, indicating persistent bearish sentiment that could worsen if discretionary spending weakens.
In a worst-case scenario, continued SG&A deleverage and weak consumer demand could push operating margins below 9%, triggering further multiple compression. The stock could retest its 52-week low of $28.36, representing a 15.8% decline from the current price of $33.70. If the company misses earnings and analysts downgrade the stock, the low target of $28.00 would imply a 16.9% loss. A more severe scenario, such as a recession reducing rural spending, could see the stock fall to the $25 range, a 25.8% decline, especially if debt concerns escalate.
FAQ
The key risks include: 1) Financial risk: high debt-to-equity of 2.30x and a quick ratio of 0.23, which could strain liquidity if cash flows decline. 2) Operational risk: operating margin compression to 11.67% from 13.01%, driven by SG&A deleverage, and revenue growth of only 2.29%. 3) Market risk: the stock is down 37.85% over the past year and could retest its 52-week low of $28.36 if sentiment worsens. 4) Competitive risk: as a specialty retailer, TSCO faces competition from larger retailers and online players, though its rural niche provides some insulation. The most severe risk is a continued margin decline leading to further multiple compression.
The 12-month forecast is neutral with a base case target of $34-37 (55% probability), a bull case of $42-45 (25% probability), and a bear case of $28-30 (20% probability). The base case assumes operating margin stabilizes around 11.5% and revenue growth of 2.5-3%, leading to a price near the analyst average of $35.56. The bull case requires margin recovery above 12% and accelerating growth, while the bear case assumes margin falls below 10% and revenue declines. The most likely scenario is the base case, with the key assumption being that the company can halt the margin erosion seen in recent quarters.
TSCO appears fairly valued to slightly undervalued relative to its history, but overvalued on a growth-adjusted basis. The trailing PE of 24.83x is below its historical average of 30-39x, and the PS ratio of 1.75x is near multi-year lows. However, the PEG ratio of 25.45 is extremely high, indicating the market is paying a premium for expected earnings growth that may not materialize. The forward PE of 16.49x suggests the market expects a significant earnings recovery, which is a positive if achieved. Compared to peers, the price-to-book of 10.55x is a premium, justified only if margins stabilize. Overall, the stock is not cheap on a growth-adjusted basis, but the absolute valuation is attractive for a defensive retailer.
TSCO may be a good buy for income-oriented investors seeking a defensive dividend stock with potential for recovery, but it carries significant near-term risks. The stock trades at $33.70, with an average analyst target of $35.56 implying 5.5% upside, and a dividend yield of 1.79%. However, operating margin has compressed to 11.67% from 13.01%, and revenue growth is just 2.29%, which could limit appreciation. The biggest downside risk is a retest of the 52-week low of $28.36, representing a 15.8% decline. For risk-averse investors, waiting for margin stabilization is prudent; for those with a long horizon, the deep valuation de-rating (forward PE of 16.49x) offers a reasonable entry point.
TSCO is more suitable for long-term investment, given its defensive business model, dividend yield of 1.79%, and potential for margin recovery over 2-3 years. The stock's beta of 0.514 indicates lower volatility, making it less ideal for short-term trading. The dividend payout ratio of 44.5% is sustainable, and the company has a history of dividend growth. However, near-term headwinds could persist, so a minimum holding period of 2-3 years is recommended to allow for margin stabilization and multiple re-rating. Short-term traders might find opportunities around earnings, but the risk/reward is less favorable due to the broken technical trend.