Tractor Supply Company
TSCO
$34.98
-0.20%
Tractor Supply Co is the largest operator of retail farm and ranch stores in the United States, offering a wide range of products including livestock, equine, agriculture, companion animal, seasonal, and hardware goods. The company targets recreational farmers and ranchers, with stores concentrated in rural communities, and operates over 2,400 Tractor Supply stores and 200 Petsense locations. Currently, the stock is under significant pressure, having fallen sharply over the past year due to margin compression and cautious guidance, but recent quarterly results showed revenue growth and reaffirmed guidance, sparking debate about whether the sell-off is overdone. Investors are focused on the company's ability to navigate a challenging retail environment while executing its growth initiatives and maintaining its dividend.…
TSCO
Tractor Supply Company
$34.98
Related headlines
Investment Opinion: Should I buy TSCO Today?
Rating: Hold. The consensus analyst rating is 'Buy' with a mean score of 2.1, but the average price target of $35.52 offers only 1.5% upside, indicating limited near-term appreciation potential. The thesis is that Tractor Supply is a fundamentally sound company facing cyclical headwinds, and the stock is fairly valued at current levels.
Sign up to view all
TSCO 12-Month Price Forecast
The AI assessment is neutral, reflecting a balanced risk/reward profile. The stock's valuation is reasonable on forward earnings, but the lack of near-term catalysts and margin pressure limit upside. The stance would upgrade to bullish if revenue growth accelerates above 5% and margins stabilize, or downgrade to bearish if margins deteriorate further and the stock breaks below its 52-week low.
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 $35.52 and implied upside of +1.5% versus the current price.
Average Target
$35.52
0 analysts
Implied Upside
+1.5%
vs. current price
Analyst Count
—
covering this stock
Price Range
$28 - $46
Analyst target range
Analyst coverage is robust with 27 analysts providing ratings, and the consensus recommendation is a 'Buy' with a mean rating of 2.1 (where 1 is Strong Buy and 5 is Sell). The average price target is $35.52, which is slightly above the current price of $34.98, implying a modest upside of about 1.5%. The distribution of ratings includes 10 Buy, 12 Hold, and 5 Sell, indicating a cautiously optimistic sentiment. The low target is $28.00, which is below the current price and near the 52-week low, while the high target is $46.00, suggesting that some analysts see significant upside potential. The wide range between the low and high targets reflects high uncertainty about the company's future performance, with the low target potentially pricing in continued margin pressure and the high target assuming a successful turnaround. Recent ratings actions have been mixed, with Mizuho downgrading from Outperform to Neutral in July 2026, while other firms maintained their ratings, indicating that sentiment is not uniformly positive.
Bulls vs Bears: TSCO Investment Factors
Tractor Supply presents a mixed picture: strong profitability and a defensive business model are offset by margin compression, high leverage, and a steep stock decline. The bull case rests on the potential for earnings recovery and the company's dominant market position, while the bear case highlights the risk of continued margin erosion and limited analyst upside. Currently, the bearish evidence is slightly stronger given the negative price momentum and deteriorating margins, but the stock's low valuation relative to forward earnings offers a compelling risk/reward for patient investors. The key tension is whether the company can stabilize margins and return to growth, which would validate the current valuation, or if the margin pressure persists, leading to further downside.
Bullish
- Revenue growth remains positive: Q1 2026 revenue grew 3.61% YoY to $3.59B, and Q3 2025 grew 7.2% YoY, showing resilience despite a tough retail environment. This indicates that demand for farm and ranch supplies remains steady, supporting the company's top-line momentum.
- Forward PE implies earnings recovery: The forward PE of 17.05x is significantly lower than the trailing PE of 24.83x, suggesting analysts expect EPS to grow to $2.585 next year. This implies a potential earnings recovery that could justify the current valuation if realized.
- Strong ROE and profitability: With an ROE of 42.46% and a net margin of 7.06%, Tractor Supply demonstrates efficient capital use and solid profitability. These metrics are well above industry averages, indicating a competitive advantage.
- Defensive business model: The company targets recreational farmers and ranchers, a niche with relatively stable demand. Recent news highlights its 'necessity-driven' model, which may provide a buffer during economic downturns, as seen in the stock's lower beta of 0.452.
Bearish
- Sharp price decline and underperformance: The stock is down 42.66% over the past year, while the S&P 500 gained 20.48%, resulting in a relative underperformance of over 63%. This reflects significant investor pessimism and a clear downtrend.
- Margin compression: Gross margin fell to 32.7% in Q1 2026 from 36.2% in Q1 2025, and operating margin dropped to 6.5% from 7.2%. This margin pressure is a key concern, as it indicates rising costs or pricing challenges.
- High leverage: Debt-to-equity ratio stands at 2.30, which is elevated for a retailer. This increases financial risk, especially if interest rates remain high or earnings decline, potentially straining cash flows.
- Analyst targets suggest limited upside: The average analyst target of $35.52 is only 1.5% above the current price, implying that the stock is fairly valued with minimal upside. The low target of $28.00 suggests potential downside of nearly 20%.
TSCO Technical Analysis
The stock is in a clear downtrend over the past year, with a 1-year price change of -42.66%, significantly underperforming the S&P 500's +20.48% gain. The current price of $34.98 is near the lower end of its 52-week range, sitting at approximately 55.6% of the range (calculated as (34.98 - 28.36) / (62.89 - 28.36) = 0.556), indicating that the stock is closer to its 52-week low of $28.36 than its high of $62.89. This positioning suggests that the market is pricing in significant pessimism, but also that the stock may be approaching oversold levels, though the trend remains bearish until a clear reversal pattern emerges.
Beta
0.45
0.45x market volatility
Max Drawdown
-53.5%
Largest decline past year
52-Week Range
$28-$63
Price range past year
Annual Return
-42.7%
Cumulative gain past year
| Period | TSCO Return | S&P 500 |
|---|---|---|
| 1m | +19.1% | +3.6% |
| 3m | +10.6% | +2.7% |
| 6m | -34.0% | +11.4% |
| 1y | -42.7% | +18.7% |
| ytd | -31.2% | +12.3% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
TSCO Fundamental Analysis
Revenue in the most recent quarter (Q1 2026) was $3.59 billion, up 3.61% year-over-year, showing modest growth despite a challenging retail environment. However, the growth rate has decelerated compared to earlier quarters, with Q2 2025 revenue of $4.44 billion representing a 4.5% increase from the prior year, and Q3 2025 revenue of $3.72 billion up 7.2% year-over-year. The company's revenue segments show that Livestock, Equine & Agriculture is the largest at $1.11 billion, followed by Companion Animal at $934 million, indicating that the core agricultural and pet categories are driving sales, while seasonal and recreation segments are smaller. The deceleration in growth suggests that the company is facing headwinds from inflation and changing consumer spending patterns, but the reaffirmed guidance indicates management's confidence in the long-term outlook.
Quarterly Revenue
$3.6B
2026-03
Revenue YoY Growth
+3.6%
YoY Comparison
Gross Margin
32.7%
Latest Quarter
Free Cash Flow
$553503000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is TSCO Overvalued?
Given that Tractor Supply has positive net income, the PE ratio is the most appropriate valuation metric. The trailing PE is 24.83x, while the forward PE is 17.05x, implying that the market expects earnings to grow significantly over the next year. This gap between trailing and forward PE suggests that analysts anticipate a recovery in earnings, which is consistent with the estimated EPS of $2.585 for the next fiscal year. Compared to the specialty retail industry average PE of approximately 15x, Tractor Supply's trailing PE of 24.83x represents a premium of about 65%, which may be justified by its dominant market position and consistent profitability, but the forward PE of 17.05x is closer to the industry average, indicating that the market is pricing in a normalization of earnings. Historically, the stock's PE has ranged from around 14x to 39x over the past few years, with the current trailing PE of 24.83x sitting near the middle of that range, suggesting that the stock is not extremely overvalued or undervalued relative to its own history.
PE
24.8x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 14x~39x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
16.8x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks are significant: Tractor Supply carries a debt-to-equity ratio of 2.30, which is high for a retailer and increases vulnerability to rising interest rates. The company's operating margin contracted to 6.5% in Q1 2026 from 7.2% a year earlier, and gross margin fell from 36.2% to 32.7%, indicating cost pressures that could persist. Free cash flow of $553.5M is positive but modest relative to the company's size, limiting flexibility for debt reduction or shareholder returns. Additionally, the payout ratio of 44.49% suggests that dividend growth may be constrained if earnings decline further.
FAQ
The key risks are: 1) Financial risk from high leverage (debt-to-equity of 2.30) and margin compression (gross margin down to 32.7% from 36.2% a year ago). 2) Competitive risk from online retailers and big-box stores that could pressure pricing. 3) Macro risk from inflation and consumer spending slowdown, which could reduce demand for discretionary items. 4) Company-specific risk of execution on expansion plans and cost control. The most severe risk is a prolonged margin decline, which could lead to earnings downgrades and a drop to the 52-week low of $28.36, a potential 19% loss from current levels.
The 12-month forecast is mixed. The base case (50% probability) sees the stock trading in a range of $33-$38, with a target of $35.52, implying a modest 1.5% upside. The bull case (25% probability) could push the stock to $40-$46 if margins recover and growth accelerates. The bear case (25% probability) could see the stock fall to $28-$30 if margin pressure persists. The most likely scenario is the base case, assuming the company maintains its current trajectory. Investors should monitor quarterly earnings for margin trends and revenue growth to gauge which scenario is unfolding.
TSCO is fairly valued based on forward earnings, with a forward PE of 17.05x, which is close to the specialty retail industry average of 15x. However, the trailing PE of 24.83x is 65% above the industry average, indicating that the market expects significant earnings growth. The PEG ratio of 25.45x is high, suggesting that the growth expectations are already priced in. Compared to its own history, the stock's PE is near the middle of its 5-year range of 14x-39x, so it is not extremely overvalued or undervalued. The market is pricing in a recovery in earnings, which is a reasonable assumption given the company's stable business model.
TSCO is a good buy for long-term investors seeking a defensive play with a dividend, but the near-term upside is limited. The stock is trading at $34.98, close to the average analyst target of $35.52, implying only 1.5% upside. The forward PE of 17.05x is reasonable, but the trailing PE of 24.83x suggests that earnings are expected to improve. The biggest risk is continued margin compression, which could push the stock down to its 52-week low of $28.36, a potential 19% downside. For investors with a 3-5 year horizon, the stock offers a good entry point, but for short-term traders, the lack of catalysts makes it less attractive.
TSCO is better suited for long-term investment due to its defensive business model, dividend yield of 1.79%, and low beta of 0.452, which indicates lower volatility. The stock has fallen 42.66% over the past year, but the company's fundamentals remain intact, and the forward PE of 17.05x suggests value. Short-term trading is risky given the lack of catalysts and the stock's proximity to its 52-week low. A minimum holding period of 3-5 years is recommended to allow the company to navigate the current margin pressures and benefit from its growth initiatives. For income investors, the dividend provides a cushion while waiting for capital appreciation.