UBS lifts BJ’s Wholesale stock target to $130, maintains buy rating

On Friday, UBS analyst Mark Carden increased the price target for BJ’s Wholesale (NYSE: BJ) shares, raising it to $130.00 from the previous $108.00, while reiterating a Buy rating for the stock. The new target represents significant upside from the current price of $111.45, with the stock already showing strong momentum, gaining nearly 11% in the past week. According to InvestingPro data, BJ’s shares are trading near their 52-week high of $113.80, reflecting Carden’s optimism about the company’s recent performance and strategic initiatives, which he believes will continue to drive market share gains in the upcoming year.

BJ’s Wholesale reported a 4.6% growth in core comparable sales for the fourth quarter, surpassing the consensus estimate of 3.1%. The company’s general merchandise segment experienced even stronger growth at 5%. These strong results contribute to BJ’s overall revenue of $20.5 billion and a healthy gross profit margin of 18.36%. These figures indicate that BJ’s Wholesale’s product assortment strategies are proving effective. Additionally, the company’s Fresh 2.0 initiative is gaining traction, encouraging members to increase their spending with the retailer across various categories.

Despite some consumer hesitation regarding discretionary spending after the quarter ended, Carden suggests that BJ’s Wholesale’s value proposition stands out, particularly in the current economic climate. The company’s guidance for comparable sales, ranging from 2.0% to 3.5%, is seen as realistic and potentially conservative, considering the broader macroeconomic uncertainties.

The raised price target to $130 reflects Carden’s confidence in BJ’s Wholesale’s ability to meet and potentially exceed its performance goals. The company’s strategic efforts and the positive reception of its initiatives among consumers are key factors contributing to this favorable outlook.

In other recent news, BJ’s Wholesale Club Holdings Inc (NYSE:BJ). reported strong fourth-quarter earnings, with an earnings per share (EPS) of 93 cents, surpassing analysts’ expectations of 88 cents. This performance has led to several analysts adjusting their price targets for the company. TD Cowen and Jefferies both raised their price targets to $135, maintaining a Buy rating, citing strong customer traffic, an 8% increase in membership fee income, and impressive sales in general merchandise. Similarly, DA Davidson increased its price target to $130, also maintaining a Buy rating, emphasizing BJ’s market share gains and improvements in membership trends.

Meanwhile, JPMorgan raised its price target to $109, keeping a Neutral rating, following BJ’s stronger-than-expected comparable store sales and a high membership renewal rate of 90%. Citi also adjusted its price target to $115, maintaining a Neutral stance, highlighting the company’s positive traffic momentum and consistent market-share gains. BJ’s guidance for fiscal year 2025 aligns with Wall Street forecasts, reinforcing confidence in its business strategy.

Analysts noted that BJ’s Wholesale’s ability to grow revenue and profits, alongside its strong membership program, underscores its competitive position in the retail market. The company’s focus on improving its merchandise assortment and reinvesting in members has contributed to its solid top-line growth. Despite concerns about valuation sustainability, analysts remain optimistic about BJ’s continued operational success and financial health.

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