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BJ's Wholesale Club (BJ) Gains But Lags Market: What You Should Know

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BJ's Wholesale Club (BJ - Free Report) closed at $41.83 in the latest trading session, marking a +1.88% move from the prior day. The stock lagged the S&P 500's daily gain of 2.21%. Meanwhile, the Dow gained 1.34%, and the Nasdaq, a tech-heavy index, added 3.86%.

Prior to today's trading, shares of the wholesale membership warehouse operator had gained 0.71% over the past month. This has outpaced the Consumer Discretionary sector's loss of 0.65% and the S&P 500's gain of 0.67% in that time.

BJ will be looking to display strength as it nears its next earnings release. On that day, BJ is projected to report earnings of $0.63 per share, which would represent year-over-year growth of 53.66%. Our most recent consensus estimate is calling for quarterly revenue of $3.70 billion, up 14.57% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.59 per share and revenue of $15.26 billion, which would represent changes of +77.4% and +15.67%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for BJ. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. BJ is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, BJ is currently trading at a Forward P/E ratio of 15.85. For comparison, its industry has an average Forward P/E of 15.89, which means BJ is trading at a discount to the group.

Also, we should mention that BJ has a PEG ratio of 1. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BJ's industry had an average PEG ratio of 1.09 as of yesterday's close.

The Consumer Services - Miscellaneous industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 224, putting it in the bottom 12% of all 250+ industries.

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

To follow BJ in the coming trading sessions, be sure to utilize Zacks.com.


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