Big Lots, Inc. (BIG): Is Now the Time to BUY?

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By Carly Forster 

Big Lots, Inc. (BIG) is a Columbus, Ohio based Fortune 500 closeout retail corporation that sells a wide variety of products, including: apparel, toys, house appliances, furniture, electronics, and packaged food and beverages. The retailer has over 1,400 locations in 48 states. The company posted their first quarter earnings on Friday, May 30 and, although better than expected, their results were less than appealing.

During their Q1 results, Big Lots, Inc. (NYSE:BIG) reported $0.50 earnings per share, beating analysts’ consensus estimate of $0.44 by $0.06. During the same quarter last year, the company posted $0.61 earnings per share. The retailer has profits of $1.28 billion for the quarter, compared to analysts’ consensus estimate of $1.26 billion. Conversely, the company’s proceeds for the quarter were down 2.3% on a year-over-year basis. On average, analysts’ predict that Big Lots will post $2.44 earnings per share for the current fiscal quarter.

Big Lots, Inc. (NYSE:BIG)’s stock jumped quite a bit hitting a two-year high after the release if their first quarter results. With the discontinuation of its Canadian operations, Big Lots’ numbers alone were mediocre at best; however, the company was able to exceed analysts’ consensus estimates and give a strong enough guidance that analysts’ and investors can rest easy. President and CEO David Campisi explained, “We are in the middle of part three of our (rebound) strategy — and that’s the heavy lifting, the execution. We truly are at the beginning of the beginning here at Big Lots.”

Shares of Big Lots, Inc. (NYSE:BIG) opened at $42.26 on Monday, June 2. The retailer has a 1-year high of $43.30 and a 1-year low of $25.50. The stocks daily moving average is $42.73 and has a 50-day moving average of $38.88. The market cap for the retailer is $2.45 billion and its P/E ratio is 25.88.

On June 2, Benchmark Co. analyst Ronald Bookbinder upgraded his rating for Big Lots from HOLD to BUY and raised his price target from $36 to $49. He acknowledged the management team’s two-prong plan of increasing traffic driving areas and decreasing areas that have continuously underperformed. Bookbinder believes the retailer will continue to downsize its store base, which will sustain low capital expenditures. Bookbinder has a +9.8% average return and a 63% success rate according to TipRanks.

Also on June 2, Wedbush analyst Joan Storms gave the stock an Outperform rating and raised her price target from $42 to $49. Storms has a +4.3% average return and a 59% success rate.

However, on June 2 Barclays analyst Meredith Adler downgraded her rating from “overweight” to “equalweight” and gave a $45 price target. Adler has a +0.4% average return and a 65% success rate.

Big Lots (BIG) currently has an analyst consensus of MODERATE BUY

Carly Forster writes about stock market news. She can be reached at [email protected]

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