Skip to Content

Tractor Supply Co TSCO

Rating as of

Morningstar’s Analysis

Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price


5-Star Price


Economic Moat


Capital Allocation


Tractor Supply’s Robust Demand Persists Lifting Operating Margin Power; Shares Remain Rich

Jaime M. Katz, CFA Senior Equity Analyst

Analyst Note

| Jaime M. Katz, CFA |

We plan to increase our $130 fair value estimate for narrow-moat Tractor Supply by a high-single-digit rate, after incorporating third-quarter results that surpassed our expectations and a lifted the fourth-quarter outlook. In the third quarter, same-store sales of 13% handily outperformed our 3% estimate (with 700 basis points stemming from inflation), driving sales to $3 billion (up 16%), and contributing $0.15 of EPS outperformance (to $1.95). Most of the remaining upside stemmed from better-than-expected selling, general, and administrative cost (including depreciation and amortization), which represented 26.1% of sales, 100 basis points better than our model, driving an incremental $0.19 upside from our $1.61 EPS projection. All in, this led to a 9.8% operating margin metric, a high-water mark for the company’s third-quarter period, 10 basis points above last year (when the company delivered same-store sales of 27%) and about 100 basis points above our forecast. 

Read Full Analysis

Company Profile

Business Description

Tractor Supply is the largest operator of retail farm and ranch stores in the United States. The company targets recreational farmers and ranchers and has little exposure to commercial and industrial farm operations. Currently, the company operates 1,967 stores in 49 states and 177 Petsense stores. Stores are typically located in towns outside of urban areas and in rural communities. In fiscal 2020, revenue consisted primarily of livestock and pet (47%), hardware, tools, and truck (21%), and seasonal gift and toy (21%).

5401 Virginia Way
Brentwood, TN, 37027
T +1 615 440-4000
Sector Consumer Cyclical
Industry Specialty Retail
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 41,000