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Research Alert: CFRA Lifts Opinion On Bj's Wholesale Club Holdings, Inc. To Buy From Hold
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Research Alert: CFRA Lifts Opinion On Bj's Wholesale Club Holdings, Inc. To Buy From Hold
Mar 8, 2024 11:22 AM

02:05 PM EST, 03/08/2024 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We lift our 12-month target by $19 to $87, 22.1x our FY 25 (Jan.) EPS of $3.94 (cut from $3.99; we initiate FY 26 at $4.39) vs. the 18x long-term average, justified by accelerating club growth (12 new clubs planned for FY 25), improving general merchandise (GM) trends, a strong digital business (over 11% penetration), and a 90%+ tenured renewal rate. We also like BJ's unique go-to-market strategy, as it has a broader assortment compared to Costco and Sam's Club, especially in grocery and consumables, but about 25% lower prices on average compared to conventional grocers. FQ4 (Jan-Q) adj-EPS of $1.11 (+11% Y/Y; flat Y/Y excluding the extra week) beat by $0.05. BJ is seeing volume/unit growth in both grocery/consumables and GM (broader industry is still seeing negative volumes), which we attribute to its value proposition, strengthening private label business (nearly 1,000 bps margin accretive vs. national brands), and a revamped rewards program. BJ's earnings power should strengthen as its newer clubs mature.

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