Ahead of the Bell: JPMorgan Raises Ross

Brian J. Tunick raised Ross to "Overweight" from "Neutral" in a client note Friday morning. Shares of Ross closed at $31.53 on Thursday.

Tunick said Ross's same-store sales or sales at stores that have been open a year or more have beat expectations over the past several months and have outpaced rival TJX Cos. stores for the past 10 months.

On Thursday, Ross said its March same-store sales fell 2 percent, but beat both Wall Street's and its own expectations. Same-store sales is an important metric in the retail sector because it measures performance at established locations.

Inventories at Ross have also been low, Tunick said, keeping down costs. Currently, the Pleasanton, Calif., company's in-store inventories are down 10 to 11 percent, which will drive lower markdowns the rest of the year.

He also pointed out a $600 million share buyback program that Ross plans to implement over the next two years, which could help drive the share price as it improves earnings per share.

Tunick raised his fiscal 2008 profit forecast to $2.22 per share from $2.16 per share.