Skip to main content

Market Overview

Big Lots Hit With Big Downgrade

Share:
Big Lots Hit With Big Downgrade

Big Lots, Inc. (NYSE: BIG) reported a "low quality" first-quarter earnings beat, which prompted Bank of America to turn bearish on the stock.

The Analyst

Bank of America's Jason Haas downgraded Big Lots from Buy to Underperform with a price target lowered from $45 to $23.

The Thesis

Big Lots reported EPS of 92 cents versus the consensus estimate of 70 cents, Hass wrote in the note. However, the outperformance includes a 39 cent per share add-back for inventory impairment and other factors along with a 14 cent per share add-back for a legal settlement loss contingency.

The company reported comps of 1.5 percent, which missed the analyst's estimate of 3 percent. Management attempted to attribute the miss to weather and a delay in tax refunds but Hass said these factors were already included in the analyst's estimate.

Management said it will accelerate the rollout of store remodels, but at the same time it also changed the language in its comp guidance. Specifically, management changed the comp benefit outlook from "high single digit to low double digits in most major markets" to "high single digits on average."

Given a lower degree of confidence in comp growth from store remodels, Haas said the stock is "likely to trade sideways at best" moving forward.

Price Action

Shares of Big Lots traded around $27.80 at time of publication.

Related Links:

Analysts Lower Big Lots Price Targets After Q3 Print

The Street Debates What To Do With Big Lots After Mixed Q4 Earnings

Photo credit: Mike Kalasnik via Wikimedia Commons

Latest Ratings for BIG

DateFirmActionFromTo
Jan 2021Loop CapitalDowngradesBuyHold
Jan 2021Deutsche BankMaintainsHold
Jan 2021BarclaysDowngradesEqual-WeightUnderweight

View More Analyst Ratings for BIG
View the Latest Analyst Ratings

 

Related Articles (BIG)

View Comments and Join the Discussion!

Posted-In: Bank of America Jason HaasAnalyst Color Short Ideas Downgrades Price Target Analyst Ratings Trading Ideas Best of Benzinga

Latest Ratings

StockFirmActionPT
NIUDaiwa CapitalInitiates Coverage On41.5
QMCONorthland Capital MarketsInitiates Coverage On12.0
IBKRJefferiesInitiates Coverage On89.0
MRETFTD SecuritiesDowngrades18.5
SWKSGoldman SachsDowngrades135.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com