D.A. Davidson maintains Buy on BJ’s Wholesale stock ahead of earnings

D.A. Davidson has maintained its Buy rating for BJ’s Wholesale (NYSE:BJ) stock, setting a price target of $105.00 ahead of the company’s earnings report. Currently trading at $94.47, the stock has approximately 11% upside to reach the analyst’s target. Six analysts have revised their earnings estimates upward for the upcoming period, with the consensus rating at 2.13, indicating a Buy rating.

BJ’s Wholesale has been investing comparable sales upside into membership value, resulting in improved traffic and strong membership trends. This strategy has led to 5.92% revenue growth over the last year, reaching $21.97 billion. However, the company is facing price deflation last quarter, which impacted comparable sales, but is expecting this pressure to ease in the current quarter.

BJ’s Wholesale is expected to post a comparable sales improvement when it reports results, despite having easier year-over-year comparisons. While the stock may be overvalued relative to its Fair Value estimate, D.A. Davidson believes the potential comparable sales improvement will serve as a catalyst for the stock.