Citi raises BJ’s Wholesale stock rating to Buy, target to $130

On Thursday, Citi analyst Paul Lejeuz upgraded BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) stock rating from Neutral to Buy and increased the price target to $130.00 from the previous $115.00. The upgrade reflects the analyst’s positive view on the company’s robust warehouse club model, which has demonstrated improved execution on membership growth, retail fundamentals, and expansion of units. This optimism is supported by the company’s impressive performance, with InvestingPro data showing a 54.61% return over the past year and strong revenue of $20.5 billion in the last twelve months.

BJ’s Wholesale has been recognized for its defensive growth appeal, particularly in the current consumer environment marked by tariff concerns and the need for defensive exposure. The analyst noted the company’s stock trades at a premium compared to its historical average, which aligns with InvestingPro data showing a P/E ratio of 28.55x and trading near its 52-week high of $118.40. While current analysis suggests the stock is trading above its Fair Value, the potential for an increased multiple is justified due to BJ’s attractive characteristics as a small to mid-cap (SMID) growth investment at this time. InvestingPro has identified 15 additional key factors affecting BJ’s valuation, available to subscribers.

The upgrade comes as BJ’s Wholesale continues to build on its strong market position, with a market capitalization of $15.14 billion. The company’s focus on membership and retail fundamentals has been a key driver in its performance, reflected in its healthy gross profit margin of 18.36%. The expansion strategy, which includes growing the number of warehouse units, has also contributed to the positive outlook from Citi.

Investors may take this rating upgrade and price target increase as a sign of confidence in BJ’s Wholesale’s future performance. The new price target of $130.00 indicates a potential upside from the company’s previous target, suggesting room for growth in the stock’s valuation.

The stock market will likely monitor BJ’s Wholesale’s progress in executing its growth strategies and maintaining the defensive qualities that make it an appealing investment, especially in light of the current economic landscape influenced by tariff discussions.

In other recent news, BJ’s Wholesale Club Holdings Inc reported a 4.6% growth in core comparable sales for the fourth quarter, surpassing the consensus estimate of 3.1%. The company also experienced an 8% year-over-year increase in membership fee income, with projected earnings per share (EPS) ranging between $4.10 and $4.30, exceeding analyst expectations. UBS analyst Mark Carden raised the price target for BJ’s Wholesale to $130, maintaining a Buy rating based on the company’s strategic initiatives and market share gains. TD Cowen analysts also maintained a Buy rating with a $135 target, highlighting BJ’s Fresh 2.0 initiative and national expansion potential.

Citi analysts, however, kept a Neutral rating, increasing the price target to $115, and noted BJ’s strong market positioning and defensive value appeal amid economic uncertainties. JPMorgan also adjusted its price target to $109, maintaining a Neutral rating while acknowledging BJ’s strong membership renewal rate and top-line growth. Despite these positive developments, some analysts expressed concerns about the company’s valuation and the impact of ongoing investments on earnings growth. Investors are closely watching BJ’s Wholesale’s strategic efforts and market dynamics as the company navigates the current retail landscape.

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