DA Davidson lowers BJ’s Wholesale stock price target on comp miss

Investing.com - DA Davidson has lowered its price target on BJ’s Wholesale (NYSE:BJ) to $123.00 from $140.00 while maintaining a Buy rating on the stock. Currently trading at $96.95 with a market capitalization of $12.9 billion, BJ’s maintains a "GOOD" Financial Health Score according to InvestingPro analysis.

The firm cited BJ’s missing consensus comparable sales estimates as well as the company’s own internal plan, though profit and earnings per share performed better than expected. Despite the sales miss, the company has maintained profitability with a gross margin of 18.65%.

DA Davidson noted that weather negatively impacted comparable sales by at least 100 basis points, mostly early in the quarter, leading the firm to expect an acceleration in stacked comparable sales in the second half.

The research firm acknowledged that for a stock that has been an outperformer in 2024 and year-to-date in 2025, even a slight comparable sales miss will cause some performance pullback.

According to DA Davidson, BJ’s focus will remain on providing value to members on non-discretionary items, particularly for lower household incomes, while the company is ordering tariffed products more cautiously. The company’s conservative approach aligns with its moderate debt levels and sufficient cash flows to cover interest payments.

In other recent news, BJ’s Wholesale Club Holdings Inc. reported its second-quarter earnings for fiscal year 2026, showcasing a mixed financial performance. The company exceeded earnings per share expectations with a reported EPS of $1.14, compared to the forecasted $1.10. However, revenue did not meet projections, totaling $5.38 billion against an anticipated $5.49 billion. Despite these results, BJ’s Wholesale raised its full-year guidance, indicating a positive outlook for future performance. The company also achieved a 2.3% increase in comparable sales, excluding gasoline, attributed to growth in customer traffic and market share. Goldman Sachs noted the improvement in performance as weather conditions normalized during the quarter. Additionally, Goldman Sachs maintained a Buy rating on BJ’s Wholesale, reflecting continued confidence in the company’s prospects. These recent developments have sparked varied reactions among investors and analysts.

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