Piper Sandler Lifts Big Lots’ PT On ‘Positive’ 3Q Outlook

Piper Sandler lifted Big Lots’ price target to $75 (59.3% upside potential) from $65 and maintained a Buy rating on the stock after the company provided a “very positive” 3Q update. On Tuesday, the discount retailer said it sees better-than-expected 3Q earnings guidance citing strong sales ahead of the holiday shopping season.

Piper Sandler analyst Peter Keith says that the set-up remains highly favourable and that the company’s 4Q will benefit from elevated demand for home furnishings.

Big Lots (BIG) forecasted that its comparable sales will increase in the mid-teens for the third quarter. Based on this sales outlook, the company said that it expects to generate 3Q earnings of $0.50 to $0.70 per share, including the expected share repurchase activity for 3Q. The 3Q earnings guidance exceeds the Street consensus of $0.21 per share. Meanwhile, the company reported a loss of $0.18 per share in the year-ago quarter.

Big Lots’ CEO Bruce Thorn said “Our assortment remains well positioned against customer demand, our Operation North Star initiatives continue to gain traction, and early reads on Christmas are very encouraging.” (See BIG stock analysis on TipRanks)

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 2 Buys and 3 Holds. The average price target of $59.20 implies upside potential of about 25.8% to current levels. Shares have increased about 64.9% year-to-date.