Tractor Supply Company (TSCO): A Bull Case Theory

We came across a bullish thesis on Tractor Supply Company on Matt McClintock Retail/Consumer Research - M Squared Capital ’s Substack by Matthew McClintock. In this article, we will summarize the bulls’ thesis on TSCO. Tractor Supply Company's share was trading at $57.83 as of July 30^th. TSCO’s trailing and forward P/E were 28.49 and 27.47 respectively according to Yahoo Finance.

Tractor Supply Company (TSCO) has returned to beating earnings, albeit marginally, though this was somewhat expected given its historical tendency to underpromise early in the year. Management’s “story of halves” narrative implied that weakness in the first quarter was acceptable so long as the second half delivered, driven by easing deflation and stronger transactions. However, the sequential deceleration in transactions in Q2, despite favorable tailwinds like weather, an Easter shift, and an easy comp base, raises concern about the trajectory.

Comps did improve sequentially through the quarter, particularly in May and June, and encouragingly, momentum has carried into Q3. Yet, questions remain around whether this reflects stronger traffic or just higher ticket sizes. New initiatives such as Fusion remodels, expanded garden centers, final-mile delivery, and PetRX are promising, but investors are beginning to question whether these efforts will meaningfully accelerate the business or simply help it maintain its current position. The once-anticipated high-single-digit lift from garden centers and Fusion remodels appears absent, despite having 650 such centers in place.

Management’s cut to share repurchase expectations, from $525–600M to $325–375M, introduces skepticism about their stated confidence. Maintaining full-year comp guidance despite Q2 outperformance similarly casts doubt on the strength of visibility. The newly introduced “managing to the midpoint” commentary may be cautious tariff-related positioning, but it adds to mixed signals. While management continues to voice strong optimism, the business hasn’t hit the low end of its long-term comp algorithm for six quarters. Targeting balanced ticket and transactions in 2H may be ambitious given historical performance, especially with broad inflation pressures returning.

Previously, we covered a bullish thesis on Tractor Supply Company (TSCO) by Flyover Stocks in May 2025, which highlighted the company’s strong rural moat, niche customer base, and defensible positioning against big-box competitors. The company’s stock price has appreciated by approximately 16.35% since our coverage. This is because the thesis played out. Flyover Stocks shares a similar perspective but emphasizes emerging concerns around transaction momentum and execution risks.

Tractor Supply Company is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held TSCO at the end of the first quarter which was 40 in the previous quarter. While we acknowledge the potential of TSCO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.