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BJ's Wholesale Club (BJ) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3 min read

BJ's Wholesale Club (BJ) closed at $39.92 in the latest trading session, marking a +1.24% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.77%. At the same time, the Dow lost 0.08%, and the tech-heavy Nasdaq gained 2.01%.

Coming into today, shares of the wholesale membership warehouse operator had lost 4.62% in the past month. In that same time, the Consumer Discretionary sector gained 2.77%, while the S&P 500 gained 2.11%.

Investors will be hoping for strength from BJ as it approaches its next earnings release, which is expected to be November 19, 2020. 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 14.49% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.59 per share and revenue of $15.26 billion, which would represent changes of +77.4% and +15.72%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for BJ. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. The Zacks Consensus EPS estimate has moved 0.12% higher within the past month. BJ is currently a Zacks Rank #2 (Buy).

Digging into valuation, BJ currently has a Forward P/E ratio of 15.2. For comparison, its industry has an average Forward P/E of 16.03, which means BJ is trading at a discount to the group.

Meanwhile, BJ's PEG ratio is currently 0.96. 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. The Consumer Services - Miscellaneous was holding an average PEG ratio of 1.25 at yesterday's closing price.

The Consumer Services - Miscellaneous industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 117, putting it in the top 47% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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Zacks Investment Research