ROST – Base Case iCDS 43bps, Negative Case iCDS 48bps, 2027 4.700% Bond YTW of 5.568%, iYTW of 4.822%, A2 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens, Low Refinancing Need

March 11, 2024

  • Credit markets are overstating ROST’s credit risk with a YTW of 5.568% relative to an Intrinsic YTW of 4.822% and an Intrinsic CDS of 43bps
  • Meanwhile, Incentive Dictate Behavior™ analysis highlights mostly negative signals for creditors. As a positive, all management members are material owners of ROST equity relative to their annual compensation, indicating they may be well-aligned with shareholders to pursue long-term value creation for the company.
  • Earnings Call Forensics™ analysis of the firm’s Q4 2023 (3/5/2024) highlights that management is confident their fourth quarter sales and earnings surpassed expectations and that shoppers responded to the strong value offered across stores.

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