Ollie’s Bargain Boosts Share Repurchase Plan By $100M

Ollie’s Bargain Outlet announced that its Board of Directors has authorized a $100 million increase in its share buyback program, bringing the aggregate limit to $159.6 million.

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The new authorization plan includes the $59.6 million remaining limit under the previously announced repurchase program that expires on March 26, 2021. As per Ollie’s (OLLI), the authorization of the additional $100 million expires on January 13, 2023.

Commenting on the enhanced repurchase limit, CEO John Swygert stated, “We are very pleased to be increasing our share buyback program and continuing to increase shareholder value. Our strong financial performance and cash flow, combined with our confidence in our future growth outlook, enabled us to increase this program while leaving us with ample liquidity to continue to execute our long-term strategy.” (See OLLI stock analysis on TipRanks)

Meanwhile, on Dec. 7, Citigroup analyst Paul Lejuez lowered his price target on Ollie’s Bargain to $78 from $91 and reiterated a Sell rating following the company’s 3Q results. Lejuez stated that the new target reflects slower growth in future years and a lower terminal multiple as the business is slowing faster than anticipated.

The Street has a cautiously optimistic outlook on Ollie’s, with 5 Buys, 4 Holds and 2 Sells adding up to a Moderate Buy analyst consensus. The average price target stands at $95.45, suggesting an upside potential of 20.6% from current levels. Shares have already risen 21.3% so far this year.