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Investing.com - TD Cowen has reiterated its Buy rating on BJ’s Wholesale (NYSE:BJ) with a $140.00 price target, expressing bullish sentiment ahead of the company’s second-quarter earnings report, due in 9 days. According to InvestingPro data, BJ’s maintains a GOOD financial health score, though it currently trades at a relatively high P/E ratio of 23.4x.
The firm has raised its second-quarter earnings per share estimate to $1.12, which is 2 cents above the Street consensus, based on expectations of stronger comparable sales growth of 3.5% versus the Street’s projection of 3.3%.
TD Cowen also anticipates EBIT margin expansion of 10 basis points year-over-year, compared to the Street’s flat expectation, citing Bloomberg alternative data that shows sales increasing 5%, traffic up 4%, and ticket down 1% year-over-year.
The research firm maintains a positive outlook on merchandise margin offsetting owned club SG&A deleverage through assortment improvements in fresh and discretionary non-food categories.
TD Cowen’s $140 price target is based on a 29x FY2 price-to-earnings multiple, with the firm suggesting that a second-quarter earnings beat could lead to an upward revision of the company’s full-year guidance.
In other recent news, BJ’s Wholesale Club Holdings Inc reported its first-quarter fiscal year 2025 earnings, achieving an adjusted earnings per share (EPS) of $1.14, which exceeded the forecasted $0.91. However, the company did not meet revenue expectations, reporting $5.03 billion against a projected $5.19 billion. DA Davidson raised its price target for BJ’s Wholesale to $140 from $130, maintaining a Buy rating, citing the company’s strong first-quarter performance and strategic initiatives like the Fresh 2.0 initiative. UBS reiterated its Buy rating and set a price target of $135, anticipating continued demand for BJ’s membership offering despite potentially softer comparable sales growth. Goldman Sachs also maintained a Buy rating with a $130 price target, expecting earnings upside due to strong traffic trends and unit volume growth in grocery categories. The firm noted increased customer engagement in general merchandise categories and greater consumer interest in BJ’s product offerings. These developments reflect a positive outlook from analysts on BJ’s Wholesale’s performance and strategic efforts.
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