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BJ's Wholesale Club (BJ) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
·3 min read

BJ's Wholesale Club (BJ) closed at $39.30 in the latest trading session, marking a -0.61% move from the prior day. This move lagged the S&P 500's daily loss of 0.3%. At the same time, the Dow lost 0.8%, and the tech-heavy Nasdaq gained 0.64%.

Heading into today, shares of the wholesale membership warehouse operator had lost 1.2% over the past month, lagging the Consumer Discretionary sector's gain of 0.66% and the S&P 500's gain of 3.25% in that time.

BJ will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.63, up 53.66% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.70 billion, up 14.57% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.59 per share and revenue of $15.26 billion. These totals would mark changes of +77.4% and +15.67%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for BJ. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. BJ is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that BJ has a Forward P/E ratio of 15.26 right now. For comparison, its industry has an average Forward P/E of 15.26, which means BJ is trading at a no noticeable deviation to the group.

We can also see that BJ currently has a PEG ratio of 0.97. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Consumer Services - Miscellaneous stocks are, on average, holding a PEG ratio of 0.97 based on yesterday's closing prices.

The Consumer Services - Miscellaneous industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 174, which puts it in the bottom 32% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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Zacks Investment Research