Ross Stores (ROST) Upgraded to Buy: What Does It Mean for the Stock?

Core Viewpoint - Ross Stores (ROST) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][2]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of changing earnings estimates, which are strongly correlated with near-term stock price movements [3]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [3]. Business Improvement Indicators - The upgrade in Ross Stores' rating reflects an improvement in the company's underlying business, suggesting that investor sentiment regarding this trend could drive the stock price higher [4]. Earnings Estimate Revisions - For the fiscal year ending January 2026, Ross Stores is projected to earn $6.36 per share, consistent with the previous year's figure, while the Zacks Consensus Estimate has increased by 4.4% over the past three months [7]. Zacks Rank System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [6]. - The system maintains a balanced distribution of ratings, ensuring that only the top 20% of stocks receive a "Strong Buy" or "Buy" rating, indicating superior earnings estimate revisions [8][9].