Big Lots (BIG) Price Target Reduced at Wedbush; 2016 Expectations Were Too High

Wedbush maintained an Outperform rating on Big Lots (NYSE: BIG), and cut the price target to $52.00 (from $58.00), following the company's 3Q earnings and 4Q guidance. Both results and guidance were in-line but management tempered expectations for 2016 by saying that EPS growth would be closer to +LDD than the nearly 20% growth expected by analysts. As a result, Wedbush reduced forecasts for 2016 EPS to $3.32 from $3.48.

Analyst John Garrett commented, "Q3 results and Q4 guidance were in line but management tempered expectations for 2016 by saying that EPS growth would be closer to +LDD than the nearly 20% growth expected by many analysts. The disconnect was primarily related to a change in the timing of incentive compensation expenses which now accrue on a three-year basis, and 2016 will be the first year in which these grants will be recognized. This clarification drove a significant reduction to 2016 EPS estimates. Formal guidance for 2016 will be provided when the company reports Q4 results in March."

For an analyst ratings summary and ratings history on Big Lots click here. For more ratings news on Big Lots click here.

Shares of Big Lots closed at $40.04 yesterday.

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