TSCO Stock Study (5-18-26)

Posted by Mark on May 14, 2026 at 07:26 | Last modified: May 18, 2026 09:03

I recently did a stock study on Tractor Supply Co. (TSCO, $30.57). A previous study is here.

M* writes:

     > 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. As of March 2026, the company
     > operated 2,435 of its namesake banners in 49 states, along with
     > 206 Petsense by Tractor Supply stores. Stores are generally
     > concentrated in rural communities rather than urban and
     > suburban areas. In fiscal 2025, revenue consisted of livestock,
     > equine & agriculture (around 27%); companion animal (24%);
     > seasonal & recreation (around 24%); truck, tool, & hardware
     > (15%); and clothing, gift, and décor (10%).

Over the past decade, this large-size company grows sales and EPS at annualized rates of 11.1% and 16.3%, respectively. Lines are up/flattening, straight, and parallel. Five-year earnings R^2 is 0.77 and Value Line (VL) gives an Earnings Predictability score of 90. Shares outstanding decrease 20.5% (2.5%/year).

Over the past decade, PTPM leads peer and industry averages while ranging from 8.6% in ’18 to 10.2% in ’16 with a last-5-year mean of 9.7%. ROE leads peer and industry averages while increasing from 29.2% to 42.2% (’25) with a last-5-year mean of 48.9% (shareholder equity consistently positive and increasing with mean 7.1%/year). Debt-to-Capital is greater than peer and industry averages while increasing from 17.2% to 69.7% (’25) with a last-5-year mean of 68.8%.

Quick Ratio is 0.08 but Interest Coverage 21.2 per M* who assigns “Wide” Economic Moat, “Exemplary” rating for Capital Allocation, and a B grade for Financial Health (per BetterInvesting® website). VL rates the company A for Financial Strength.

With regard to sales growth:

• YF gives YOY ACE 4.5% and 5.6% for ’26 and ’27 (based on 26 analysts).
• Zacks gives YOY ACE 4.5% and 5.6% for ’26 and ’27, respectively (9 analysts).
• VL projects 7.2% per year from ’25-’30.
• CFRA projects 5.4% YOY and 4.6% per year for ’26 and ’25-’27, respectively.
• M* gives 2-year ACE of 5.6% per year and projects 5-year annualized 6.0% in Equity Report.

My 4.0% annualized forecast is below the range.

With regard to EPS growth:

• MarketWatch gives ACE 7.3% and 7.0% per year for ’25-’27 and ’25-’28, respectively (based on 33 analysts).
• Nasdaq.com gives ACE 11.5% and 10.7% per year for ’26-’28 and ’26-’29 (13 / 4 / 2 analysts for ’26 / ’28 / ’29).
• Seeking Alpha projects 4-year annualized of 9.4%.
• Finviz gives ACE 5-year annualized of 7.6% (5).
• Argus projects 5-year annualized of 11.0%.
• LSEG projects LTG of 7.3%.
• YF gives YOY ACE 3.2% and 8.9% for ’26 and ’27, respectively (22).
• Zacks gives YOY ACE 4.4% and 9.3% for ’26 and ’27, respectively, and 5-year annualized of 8.1% (13).
• VL projects 11.2% annualized from ’25-’30.
• CFRA projects 6.8% YOY and 9.3% per year for ’26 and ’25-’27 along with 3-year CAGR of 8.0%.
• M* gives ACE long-term 10.5%/year and projects 10.5% annualized from ’25-’30 in Equity Report.

My 7.0% forecast is below the long-term-estimate range (mean of eight: 9.4%). Initial value is 2026 Q1 EPS of $2.04/share (TTM) rather than ’25 EPS of $2.06.

My Forecast High P/E is 22.0. Over the past 10 years, high P/E ranges from 22.7 in ’18 to 31.1 in ’25 with a last-5-year mean of 27.8 and last-5-year-mean average P/E of 23.4. I am below the range.

My Forecast Low P/E is 11.0. Over the past 10 years, low P/E ranges from 10.0 in ’20 to 22.7 in ’25 with a last-5-year mean of 19.0. I am forecasting near bottom of the range (only ’20 is less).

My Low Stock Price Forecast (LSPF) of $22.40 is default based on initial value from above: 26.7% less than previous close and 23.8% less than 52-week low.

Over the past 10 years, Payout Ratio (PR) ranges from 23.5% in ’20 to 44.7% in ’25 with a last-5-year mean of 38.1%. I am forecasting below the range at 23.0%.

These inputs land TSCO in the HOLD zone with a U/D ratio of 4.0. Total Annualized Return (TAR) is 16.6%.

PAR (using Forecast Average—not High—P/E) of 10.5% is decent for a large-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I start by comparing my inputs with Member Sentiment (MS). Based on 134 studies done in the past 90 days (29 outliers including mine excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 6.4%, 9.2%, 26.0, 17.9, and 35.8% respectively. I am lower across the board. VL projects a future average P/E of 21.5 that is less than MS (22.0) and greater than mine (16.5).

MS high / low EPS are $3.26 / $2.04 versus my $2.86 / $2.06 (per share). My high EPS is less due to a lower growth rate. VL (M*) high EPS of $3.50 ($3.39) is greater than both.

MS LSPF of $34.70 (INVALID on today’s date) implies a Forecast Low P/E of 17.0: less than the above-stated 17.9. MS LSPF is 5.0% less than the default $2.04/share * 17.9 = $36.52 resulting in more conservative zoning. MS LSPF exceeds mine by 54.9%, however.

MOS is robust in the study because my inputs are near or less than historical/analyst/MS averages/ranges. Also supportive of the MOS is MS TAR exceeding mine by 0.8% per year [per BI website but incorrect. Given MS high price of $83.50, this calculates to 22.3% even without dividend] and my substantially lower LSPF.

With regard to valuation, PEG is 1.8 and 2.0 per Zacks and my projected P/E, respectively: slightly high (M* has 2.1). Relative Value [(current P/E) / 5-year-mean average P/E] is low at 0.64. “Quick and Dirty” DCF method has stock undervalued by 45% and M* reports stock at a 36% discount.

Per U/D, TSCO is a BUY right now (under $32.50/share). Given a forecast high price ~$63, BetterInvesting® TAR criterion is met [62.9 / ((13.87 / 100 ) +1 ) ^ 5] ~ $33.

A 90-day free trial to BetterInvesting® may be secured here (also see link under “Pages” section at top right of this page).