Wells Fargo downgrades Ollie’s to Equal Weight into Q4 uncertainty

Wells Fargo downgraded Ollie’s Bargain Outlet (OLLI) to Equal Weight from Overweight with a price target of $95, down from $100. The firm says the best time to own Ollie’s may have passed. Management has “firmed up the foundation while capturing cyclical tailwinds,” but the path forward “seems trickier than appreciated and big picture questions linger,” the analyst tells investors in a research note. Wells sees Q4 uncertainty given the holiday calendar and Big Lot liquidations. Meanwhile, tight retail inventories in 2025 may lead to a less robust closeout buying backdrop, while gross margin upside seems limited with Ollie’s at its target, adds Wells. As such, it views the stock’s risk/reward as balanced at this price.