Connect with us

Hi, what are you looking for?

Alive Business PlanAlive Business Plan

Stock

Target, BJ placed on Negative Tactical list at Evercore

Investing.com — Evercore ISI analysts on Thursday issued a negative tactical trading call on shares of Target Corporation (NYSE:TGT) and BJ’s Wholesale Club Holdings (NYSE:BJ).

The move comes ahead of the companies’ upcoming third-quarter earnings reports, citing several concerns that could weigh on their financial performance.

For Target, the firm anticipates a sales trend deceleration to result in third-quarter earnings per share (EPS) of $2.28, slightly below the consensus estimate of $2.30. Despite this figure being within Target’s August guidance range, Evercore is wary of a continuing deceleration into the fourth quarter.

“With easy shrink accrual comparisons cycling after 3Q, we believe TGT management team (including the new CFO who started during 3Q) will lean conservative into the holiday outlook,” Evercore analysts led by Greg Melich said in a note.

They project a potential downside for Target’s stock price to $140, based on an estimated calendar year 2025 EPS of $10.45.

For, BJ’s Wholesale Club, the investment bank foresees 8-10% downside potential to near $80 for BJ’s shares, reflecting a cautious outlook on consumer spending and margin profiles moving into the fourth fiscal quarter.

Analysts estimate a third-quarter comp of 1.4%, with an EPS of $0.92, both figures slightly below consensus estimates. The firm also notes BJ’s reduced full-year gross margin guidance and potential headwinds to membership fee growth.

“BJ’s is facing a challenging middle income consumer spend backdrop, with share encroachment from Walmart/Costco/Amazon to constrain growth in consumables and flat to slight growth for general merchandise,” analysts said.

The firm also points to wage inflation and the need for reinvestment in store experience as additional pressures on BJ’s operating margins. Moreover, BJ’s recent COO resignation and the challenges of launching new general merchandise offerings during the critical holiday season are seen as risks that could impact fourth-quarter results.

BJ’s current valuation, at over 21 times forward two-year EPS, is the highest since its 2017 IPO, which Evercore believes limits the stock’s upside potential.

“With earnings estimates at modest risk, we think the risk/reward into next week’s print skewed to the downside,” analysts noted.

This post appeared first on investing.com
Become a VIP member by signing up for our newsletter. Enjoy exclusive content, early access to sales, and special offers just for you! As a VIP, you'll receive personalized updates, loyalty rewards, and invitations to private events. Elevate your experience and join our exclusive community today!

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    You May Also Like

    Latest News

    The Gateway Pundit, a far-right website, published a note from its editor on Saturday acknowledging that two election workers in Georgia did not engage...

    Latest News

    New majorities in Congress, particularly when the incoming party has a new leader, offer the rare chance for the institution to take a breath...

    Investing

    JAKARTA (Reuters) -Indonesia has asked Alphabet (NASDAQ:GOOGL)’s Google and Apple (NASDAQ:AAPL) to block Chinese fast fashion e-commerce firm Temu in their application stores in...

    Latest News

    Sister Stephanie Schmidt had a hunch about what her fellow nuns would discuss over dinner at their Erie, Pennsylvania, monastery on Wednesday night. The...



    Disclaimer: alivebusinessplan.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


    Copyright © 2024 alivebusinessplan.com