BJ’s Wholesale stock price target lowered to $115 by TD Cowen on weather impact

Investing.com - TD Cowen has lowered its price target on BJ’s Wholesale (NYSE:BJ) to $115.00 from $140.00 while maintaining a Buy rating on the stock, citing weather-related challenges affecting the retailer’s performance. The stock, currently trading near $96, has fallen significantly over the last three months according to InvestingPro data, though analysts maintain an average price target suggesting 24% upside potential.

The wholesale club reported second-quarter comparable sales growth of 2.3%, with grocery sales increasing 3% while general merchandise declined 2%. The company specifically noted double-digit percentage drops in recreational and lawn categories, which analysts attributed to unfavorable weather conditions.

Despite these challenges, BJ’s Wholesale raised its fiscal year earnings per share guidance to $4.20-4.35 from its previous outlook of $4.10-4.30, demonstrating confidence in its overall business trajectory despite what TD Cowen described as a "choppy consumer & weather environment."

The retailer exited the quarter with clean inventory levels, down 2% year-over-year overall and 6% year-over-year on a per-club basis compared to net sales growth of 3%. TD Cowen noted that in-stock levels improved by 50 basis points year-over-year during the second quarter, reaching their highest level "in a while."

BJ’s Wholesale currently operates 250 clubs and is expected to grow its store count by 5-6% this year and next, outpacing competitor Costco’s anticipated 2-3% growth rate, according to TD Cowen’s analysis.

In other recent news, BJ’s Wholesale Club Holdings Inc. reported its second-quarter earnings for fiscal year 2026, showing mixed financial results. The company achieved an earnings per share (EPS) of $1.14, which was above the forecast of $1.10. However, revenue did not meet expectations, totaling $5.38 billion compared to the anticipated $5.49 billion. Despite these earnings results, BJ’s Wholesale raised its full-year guidance. Analysts from Goldman Sachs noted that the company’s comparable sales increased by 2.3% when excluding gasoline, driven by traffic growth and market share gains. UBS lowered its price target for BJ’s to $125, maintaining a Buy rating, and highlighted the positive effects of BJ’s Fresh 2.0 initiative and strong membership dynamics. DA Davidson also reduced its price target to $123, citing missed comparable sales estimates but acknowledged better-than-expected profit and EPS performance. These developments reflect the ongoing adjustments and strategic investments BJ’s is making amid macroeconomic challenges.

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