In a note released Monday, Benchmark analyst Ronald Bookbinder upgraded shares of Big Lots (NYSE: BIG) from Hold to Buy and increased the firm's price target from $36 to $49.
In describing his position on the company, Bookbinder acknowledged that the outlook for operating margin in the current quarter remains negative, but he noted that comps have turned positive, despite the harsh weather in the first quarter.
Bookbinder pointed to management's two-prong plan of expanding traffic driving areas and downsizing those which have continued to underperform. Looking to the areas that continue to post solid results and drive traffic, Bookbinder noted management's focus on expanding its consumables and furniture financing segments throughout its entire storebase.
Looking forward, Bookbinder expects the company to continue to shrink its storebase, which will maintain low capital expenditures. Additionally, he believes the company will continue to repurchase shares in future quarters.
Shares of Big Lots were trading up just under one percent following the upgrade upon last check.
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