Loop Capital believes Ollie’s Bargain Outlet will continue to benefit as macroeconomic weakness pushes consumers further down the price curve. The investment firm upgraded the discount retailer’s rating from hold to buy and raised its price target to $135 from $130, implying a 25% upside from Friday’s closing price. Loop’s upgrades come after a recent store tour led by company management, analyst Anthony Chukumba wrote. He raised his fourth-quarter forecast based on store visits and wrote that Ollie’s appears well-positioned heading into the holiday season as consumers continue to “trade up” from higher-priced alternatives. OLLI YTD Mountain OLLI YTD Chart Chukumba cited the bankruptcy of Big Lots Stores, another American discount retail chain, as a factor pushing up the stock price. “The Big Lots liquidation is the ‘gift that keeps on giving,’ especially given the number of potential store locations and increased supplier relationships that will result,” he wrote. Meanwhile, Chukumba said Ollie’s has also improved in terms of its range of food and consumables, including nationally branded breakfast cereals, which management noted are always in high demand. Other supplies include liquid laundry detergent and brown paper towels. These consumables will help drive more consistent store visits, analysts said. “While management has stated that Ollie’s has no intention of becoming a food retailer, the company has had improved access to nationally branded food products since Big Lots filed for Chapter 7 in late 2024,” he added. The analyst also praised the company for taking a “much more data-driven and scientific approach to business compared to its predecessor.” For example, this year Ollie’s started carrying more assortments of holiday merchandise and gifts instead of toys. He also noted that the store carries a large selection of heating products, such as heaters and heating blankets, and that sales are increasing as the weather gets colder. Ollie’s Bargain Outlet stock has fallen 2% this year.
