BJ’s Wholesale Club (BJ) wins but lags the market: what you need to know

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IIn the last trading session, BJ’s Wholesale Club (BJ) closed at $57.93, marking a +1.28% move from the previous day. The stock lagged the S&P 500 daily gain of 2.44%. Meanwhile, the Dow Jones gained 1.65% and the tech-heavy Nasdaq gained 0.28%.

Prior to today’s trading, shares of the wholesale member warehouse operator were down 14.14% in the past month. This was lower than the Consumer Discretionary sector’s 14.06% loss and the S&P 500’s 9.65% loss during this period.

BJ’s Wholesale Club will be looking to show strength ahead of its next earnings release. In this report, analysts expect BJ’s Wholesale Club to post earnings of $0.74 per share. This would mark a year-over-year growth of 5.71%. Our most recent consensus estimate calls for quarterly revenue of $4.4 billion, up 11.46% from the prior year period.

Looking to the full year, our Zacks consensus estimates suggest analysts are expecting earnings of $3.18 per share and revenue of $16.82 billion. These totals would mark changes of +2.91% and +9.01%, respectively, from last year.

Any recent changes in analyst estimates for BJ’s Wholesale Club should also be noted by investors. These revisions help show the ever-changing nature of short-term trading trends. Therefore, we can interpret positive estimate revisions as a good sign for the company’s business outlook.

Our research shows that these estimate changes are directly correlated to short-term stock prices. Investors can take advantage of this by using the Zacks ranking. This model accounts for these estimation changes and provides a simple and actionable scoring system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven track record of outperformance, with #1 stocks returning an average of +25% per year since 1988. In the past 30 days, our consensus EPS projection is down 0.08%. BJ’s Wholesale Club currently sports a Zacks rank of #3 (Hold).

Valuation is also important, so investors should note that BJ’s Wholesale Club has a forward P/E ratio of 18 at this time. His industry sports an average Forward P/E of 10.69, so we could conclude that BJ’s Wholesale Club is trading at a premium comparatively.

Meanwhile, BJ’s PEG ratio is currently 1.8. The PEG ratio is similar to the widely used P/E ratio, but this measure also takes into account the company’s expected earnings growth rate. BJ’s industry had an average PEG ratio of 1.22 at yesterday’s close.

The Consumer Services – Miscellaneous industry is part of the Consumer Discretionary sector. This industry currently has a Zacks industry ranking of 102, which places it in the top 40% of over 250 industries.

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

Be sure to use Zacks.com to track all of these stock movement metrics, and more, in future trading sessions.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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