Taking on analysts’ expectations and winning: BJ’s Wholesale Club Holdings Inc. (BJ)

BJ’s Wholesale Club Holdings Inc. (NYSE: BJ) stock jumped 0.17% on Friday to $75.63 against a previous-day closing price of $75.50. With 1.32 million shares changed hands, the volume of the stock remained lighter than its average volume of 2.2 million shares. During the session, the Discount Stores company that operates in wider Consumer Defensive sector, reached to the highest price of $76.96 whereas the lowest price it dropped to was $75.35. The 52-week range on BJ shows that it touched its highest point at $79.69 and its lowest point at $51.45 during that stretch. It currently has a 1-year price target of $82.81. Beta for the stock currently stands at 0.42.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of BJ was down-trending over the past week, with a drop of -2.00%, but this was up by 4.74% over a month. Three-month performance surged to 26.01% while six-month performance rose 17.27%. The stock gained 29.28% in the past year, while it has gained 12.93% so far this year. A look at the trailing 12-month EPS for BJ yields 3.56 with Next year EPS estimates of 3.90. For the next quarter, that number is 0.80. This implies an EPS growth rate of 1.90% for this year and 8.81% for next year. EPS is expected to grow by 6.50% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 54.30%.

Float and Shares Shorts:

At present, 134.34 million BJ shares are outstanding with a float of 133.49 million shares on hand for trading. On Jul 14, 2022, short shares totaled 4.75 million, which was 3.51% higher than short shares on Jun 14, 2022. In addition to Mr. Christopher J. Baldwin as the firm’s Exec. Chairman, Mr. Robert W. Eddy serves as its Pres, CEO & Director.

Institutional Ownership:

Through their ownership of 104.50% of BJ’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 60.45% of BJ, in contrast to 39.62% held by mutual funds. Shares owned by individuals account for 10.90%. As the largest shareholder in BJ with 9.85% of the stake, The Vanguard Group, Inc. holds 13,305,966 shares worth 13,305,966. A second-largest stockholder of BJ, BlackRock Fund Advisors, holds 10,613,131 shares, controlling over 7.86% of the firm’s shares. Fidelity Management & Research Co is the third largest shareholder in BJ, holding 9,977,483 shares or 7.39% stake. With a 2.96% stake in BJ, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 3,994,619 shares are owned by the mutual fund manager. The iShares Core S&P Mid Cap ETF, which owns about 2.94% of BJ stock, is the second-largest Mutual Fund holder. It holds 3,968,420 shares valued at 295.61 million. Vanguard Small Cap Index Fund holds 2.53% of the stake in BJ, owning 3,415,344 shares worth 254.41 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for BJ since 20 analysts follow the stock currently. There are 12 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 6 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With BJ analysts setting a high price target of $93.00 and a low target of $63.00, the average target price over the next 12 months is $81.71. Based on these targets, BJ could surge 22.97% to reach the target high and fall by -16.7% to reach the target low. Reaching the average price target will result in a growth of 8.04% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. BJ will report FY 2023 earnings on 03/02/2023. Analysts have provided yearly estimates in a range of $3.70 being high and $3.50 being low. For BJ, this leads to a yearly average estimate of $3.59. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. BJ’s Wholesale Club Holdings Inc. surprised analysts by $0.26 when it reported $1.06 EPS against a consensus estimate of $0.80. The surprise factor in the prior quarter was $0.15. Based on analyst estimates, the high estimate for the next quarter is $0.96 and the low estimate is $0.70. The average estimate for the next quarter is thus $0.82.

Summary of Insider Activity:

Insiders traded BJ stock several times over the past three months with 6 Buys and 11 Sells. In these transactions, 14,276 shares were bought while 65,633 shares were sold. The number of buy transactions has increased to 33 while that of sell transactions has risen to 37 over the past year. The total number of shares bought during that period was 265,751 while 337,871 shares were sold.

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