For years, TJ Maxx and Marshalls have pulled in more bargain-hunting shoppers than Ross Stores. However, that may be starting to change.
On Oct. 26, UBS said a new strategy under CEO James Conroy could finally help Ross catch up to its biggest rival. Because of that, the firm upgraded Ross Stores (ROST) from Neutral to Buy and raised its price target to $315 from $239.
If you are not familiar with Ross, the company sells items under two brands, Ross Dress for Less and dd’s DISCOUNTS. The company buys extra inventory from brands and vendors at low prices, then resells them at even lower prices than regular retail.
What UBS analysts see in the stock
Ross wants its sales to catch up to its rival, and last year, the company got a new CEO to help achieve that goal.
Back in 2017, Ross and TJX made roughly the same amount of sales per square foot of store space. However, by the end of 2025, TJX’s number had increased by 44%, while Ross’s had grown by just 24%, TradingView reported.
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However, UBS analyst Jay Sole thinks investors are underestimating how fast Ross’s latest CEO can close that distance. “We think the market doesn’t appreciate how much ROST closing this gap will drive comp growth in FY27 and beyond,” Sole wrote.
He believes that with the CEO’s plans, Ross should grow its sales by about 8.5% per year over the next two years, about 260 basis points above what Wall Street generally expects.
Ross Stores is trying to narrow its sales-per-store gap with TJ Maxx under CEO James Conroy.
How Ross Stores CEO James Conroy plans to turn things around
Conroy became Ross’s CEO on Feb. 2, 2025. Before he took on the chief executive role, he was in charge of Boot Barn, a company he grew from a mid-sized western-wear chain into a national name. Now he plans to help Ross improve its sales.
The first way he plans to do that is by getting better merchandise. Ross is adding more recognizable brands and a steadier mix of “good, better, and best products” to its lineup. Investing.com reported that this shift has already boosted the sales of women’s apparel.
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The CEO is also focusing more on marketing, and Sole said the marketing shift is “probably the one most underappreciated by the market.”
He noted that Ross used to spend only 0.4% of sales on ads, while TJX spent 1.1%. However, Conroy is investing more in social media and streaming ads to attract younger shoppers.
In addition, the company is paying more attention to the stores themselves, including things like faster checkout and cleaner aisles. It even moved more staff from back rooms to the sales floor.
Why value shoppers keep picking discount stores
A UBS Evidence Lab survey found that 79% of U.S. consumers say value for money is the main reason they pick a retailer, Yahoo Finance reported.
And with the current economic situation, every dollar matters.
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According to the National Retail Federation, discount stores rank as one of the top destinations for 2026 holiday shopping.
And because the price tag at Ross is 20% to 60% below the department-store average, Ross should keep pulling in shoppers looking to cut costs compared with pricier chains such as Macy’s and Kohl’s.
What to consider before buying ROST stock
Ross’s sales grew well from the second half of 2025 into the first half of 2026. However, sales growth usually slows down after a company experiences a big year. That means it might be hard for Ross to get better numbers than it did during this period.
Also, I believe that if diesel prices keep climbing due to the war in the Middle East, Ross will have to spend more to move goods from suppliers to its stores, which will affect its profits.
Even with those risks, UBS sees ROST increasing by about 37% from its Oct. 23 close of $229.30. In addition, the stock already trades near 26 times forward earnings for fiscal 2026, which means a lot of the good news is already priced in.
So if you’re thinking of buying the stock, it might be better to wait for a pullback, or at least the next earnings report in late November, to get a better entry point.
