Evercore ISI is initiating a negative tactical trading call on BJ‘s Wholesale (BJ) ahead of fiscal Q3 results due next Thursday, November 21, and adding the stock to the firm’s “Tactical Underperfom” list. The firm sees 8%-10% downside potential to near $80 per share for BJ, citing SG&A deleverage risk in Q3 and concerns that the company may have a cautious tone on the consumer and margin profile heading into Q4. The firm estimates comp growth of 1.4% in Q3, versust the Street at 1.9%, with EPS at 92c, below the Street at 93c, and notes that its Q4 comp and EPS estimates are below the Street consensus. The firm has an In Line rating and $88 price target on BJ’s shares.
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