Big box discount chain BJ's Wholesale Club is benefiting from consumers turning to value retailers amid uncertainty due to still elevated inflation among other things. On Monday, the Relative Strength (RS) Rating for BJ's Wholesale stock improved from 66 to 72. BJ's is slated to announce first quarter earnings results Tuesday before the market opens.
The upgraded RS Rating means that BJ's Wholesale Club outperformed 72% of all stocks in terms of price appreciation this past year.
BJ's Wholesale Stock Highly Rated Overall
Among its other key ratings BJ's Wholesale stock has an 84 Composite Rating, putting it in the top 16% overall. IBD's Composite Rating is a mix of fundamental and technical metrics that provides a quick way to spot winning stocks. The Westborough, Mass.-based company also sports a near-best 96 Earnings Per Share Rating out of a best-possible 99. Additionally it has an A SMR Rating (sales + profit margins + return on equity), on an A-to-E scale, With A superb and E lousy. The A rating points to very strong fundamentals.
One yellow flag is its D Accumulation/Distribution Rating on an A+ to E scale. The D A/D Rating indicates that big money investors like insurance funds and mutual funds are still on the sidelines.
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Stock watchlist candidate BJ's Wholesale operates 235 clubs and 164 gas stations, mostly in the Eastern U.S. Its stock is trying to complete a flat base with a 78.98 entry. See if it can break out in heavy trading. Please note that its stock has drifted downward since late April. Its earnings report on Tuesday could ignite a rise or push it lower.
The November 2018 IPO traded at 20.56 shortly after going public. It's risen about 236% since then to trade at about 69 Monday afternoon. It hit an all-time high 80.11 last November and has consolidated since then.
Earnings, Revenue Growth Rate Rose Last Quarter
The company saw both earnings and sales growth rise last quarter. Earnings-per-share grew 25% to $1 per share, up from 9% the prior quarter. Revenue rose 13% to $4.93 billion, edging up from 12% the quarter before that.
The company holds the No. 4 rank among its peers in the Retail-Discount & Variety industry group. Five Below and Ollie's Bargain Outlet are also among the group's highest-rated stocks.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
IBD's proprietary rating measures share price action with a 1 (worst) to 99 (best) score. The rating shows how a stock's price movement over the trailing 52 weeks holds up against all the other stocks in our database.
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