Wells Fargo upgrades this discount retail chain on store growth and value-shopping tailwinds

Ollie’s Bargain Outlet is positioned to benefit from a potential pickup in consumer spending, according to Wells Fargo. The bank upgraded the discount store chain to overweight from equal weight. Analyst Edward Kelly also lifted his price target to $130 from $120. This new price target is approximately 24% higher than where shares ended on Thursday. Shares of Ollie’s Bargain Outlet have slipped 4% this year. Over the past 12 months, the stock has added nearly 4%. Kelly said this performance does not properly reflect its outlook. “OLLI has been a debated, volatile stock historically, and entry point usually proves critical,” he wrote. “With the stock 25% below its 52-week high (S & P 500 -2%; XRT -12%) and trading at 24x and 21x our '26 and '27 EPS estimates, respectively, the risk/reward looks appealing to us given the earnings tailwind from store growth.” OLLI 1Y mountain OLLI 1Y chart The upgrade follows Ollie’s posting Q4 results on Thursday. While the company reported in-line earnings and a revenue miss, same-store sales grew by 3.6% — slightly beating a FactSet consensus. The stock added 1% following the announcement. “OLLI’ story continues to build momentum; we haven’t always been on board, but confidence is building into an attractive '26 set-up,” Kelly wrote. The analyst added that confidence in management continues to grow. While the fourth quarter was generally as expected, management’s update provided encouragement, he wrote. Kelly also believes that Ollie’s set-up looks compelling as a beneficiary of the " big beautiful bill ." The bill, signed into law by President Donald Trump last summer, should offer several new tax breaks. “We are particularly positive on the 1H set-up for OLLI, as the company looks well positioned to capture BBB stimulus. It has an older customer, so it’s leveraged to the higher tax deduction for seniors and Soc. Sec. COLA, it has decent exposure to SALT states, its product offering seems well aligned to capture refund spending, and we suspect customers remain value conscious,” the analyst wrote. Comparable same-store sales should also be improving at Ollie’s as the retail chain makes merchandising changes, Kelly said. “We see opportunity in the focus on improving space productivity (ex. furniture in/carpet out), growing vendor partnerships adds to inventory consistency, close-outs overall still seem good (“off the charts” per mgmt), and trade-down remains a tailwind,” he wrote. “2H '26 comp concerns may be overdone.” The analyst added that strong store growth and highly productive store openings are key to Ollie’s growth algorithm. He noted that the company opened a record 86 stores last year, sees 75 new stores coming in 2026, and thinks it could sustain a 10% growth rate over time.