Ross Stores (NASDAQ:ROST) continue to gain ground in the wake of Thursday’s upbeat Q3 results, even as CEO Barbara Rentler reiterated that the results were “disappointing” compared to H1 performance on the company’s earnings call. And although comparable sales were negatively impacted by adverse weather conditions, the outlook remains favorable into the holiday season.

“Many of our merchandise areas that have been performing well are important fourth quarter and holiday businesses,” Rentler added on the call.

Analysts are cautiously optimistic, however, and peg the company’s long-term progress on success with its branded strategy and the performance of its incoming CEO, Boot Barn’s (BOOT) Jim Conroy.

“Success in both these areas could drive EPS upside medium-term that isn’t yet in our numbers,” Bernstein analyst Aneesha Sherman says, but there is still more upside to close the valuation gap to TJX Companies (TJX), she adds.

Ross’s (ROST) key to success lies in management’s ability to increase store count without negatively impacting the average revenue per store, Seeking Alpha analyst Rob Barnett says, adding that the company is largely insulated from economic headwinds given its value proposition.

“A slowing economy may very well present opportunities for ROST as many shoppers may become more value conscious and likely to shop at Ross Stores,” Barnett says.

Morgan Stanley’s Alex Straton agrees that Ross’s (ROST) price points are also an advantage “in both a discerning consumer environment and challenging [second half 2024] retail set,” which supports Straton’s Overweight rating on Ross (ROST) and $164 price target.

J.P, Morgan’s Matthew Boss also gives Ross (ROST) an Overweight rating as the company remains “favorably positioned in a growing off-price pie with market share opportunity from department share loss.” While there are risks that comparable sales growth could continue to slow and pressure earnings, Boss is maintaining a bullish rating on Ross (ROST) and lifts his target price to $173, a further 21% in the stock’s last closing price.

Shares rallied as much as 9% on Friday before surrendering some gains as the morning wore on. The stock is up 3% and set to close above its 50-, 100-, and 200-day moving averages for the first time in almost 2 months.