Ollie's Bargain Outlet is the leader in a niche that's only getting bigger – and the market isn't fully appreciating that yet, according to Jefferies. The firm upgraded the discount retailer on Thursday to buy from hold. It also lifted its price target on the stock to $130 from $120, implying about 42% of potential upside. Shares rose more than 3% in afternoon trading. OLLI YTD mountain Ollie's Bargain Outlet in 2026 The company has a unique moat in its ability to buy cheap excess inventory at scale, which was one of the drivers behind the firm's upgrade, according to Jefferies analyst Randal Konik. Ollie's is trading at a lower valuation than Five Below , despite similar growth, and has more stores and national reach than its competitors in the discount retail space, the analyst said. "OLLI is the #1 in closeout," or leftover inventory, "at a moment when scale matters most," Konik said. "OLLI shares have de-rated on peak-margin concerns, freight uncertainty, and comp durability, alongside softer Q4 new-store results driven by a deliberate soft opening strategy. As cohorts mature, this approach smooths ramps and could unlock comp upside, leaving unit growth better positioned ahead." Ollie's has about 645 stores (compared to its next closest competitor, which has 159), twice as many distribution centers, and management sees growth opportunity to 1,300 stores, the analyst said. Additionally, with the retail landscape under pressure, there are more clearance goods available to buy at a discount but fewer buyers competing for them, he added. "Closeout has shifted from a tactical outlet to a structural channel as big-box rationalization reduces vendor pricing power," Konik said. "Retail stress amplifies deal flow, but is no longer required for OLLI to source product." —CNBC's Michael Bloom contributed reporting.
