UPDATE: BofA Securities Upgrades BJ's Wholesale (BJ) to Buy on Strong Trends in Tough Environment

August 18, 2022 9:47 AM EDT
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Price: $74.92 +2.90%

Rating Summary:
    16 Buy, 9 Hold, 2 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 6 | Down: 13 | New: 11
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(Updated - August 18, 2022 9:52 AM EDT)

BofA Securities analyst Robert Ohmes upgraded BJ's Wholesale (NYSE: BJ) from Neutral to Buy with a price target of $83.00 (from $72.00).

The analyst comments "We upgrade BJ to Buy from Neutral, and raise our PO to $83 (was $72} to reflect 22x (was 19-20x) our new $3.75 F24E EPS. We view 22x as fair given continued membership strength, BJ's attractive value proposition in a highly inflationary environment,and recent strong results. BJ reported F2Q adj. EPS of $1.06, ahead of our $0.82 estimate and the Street at $0.80. Same-store sales (ex-fuel) increased 7.6%y/y (above our +3% estimate), led by "gains in traffic and market share/' Inflation contributed 9 points Lo the comp. BJ's saw growth in both Grocery, Perishables and Sundries (+8%y/y) as well as General Merchandise & Services (*4% y/y). Gas contributed positively to profits in the quarter while merchandise margins ex-gas decreased -50bps y/y given pressure from increased freight costs as well as investments in inflationary categories and markdowns in general merchandise inventory."

For an analyst ratings summary and ratings history on BJ's Wholesale click here. For more ratings news on BJ's Wholesale click here.

Shares of BJ's Wholesale closed at $69.13 yesterday.

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