Barron's BJ's Wholesale Club pick pays off as shares gain 10% since January

what happened

Barron's reports that its January recommendation on BJ's Wholesale Club Holdings has returned about 10%, while the small-cap-focused Russell 2000 gained 2% over the same stretch. BJ's shares also outpaced Costco and Walmart, which rose roughly 2% and 1% respectively.

According to the company, BJ's posted fiscal second-quarter total revenue of $6.23 billion, up 15.7% from a year earlier. Comparable club sales excluding gasoline grew 3.1%, ahead of the 2.6% that Walmart reported for its U.S. business excluding fuel. The member base reached a record 8.5 million, and digital sales through its app made up 16% of merchandise sales.

D.A. Davidson analyst Michael Baker reaffirmed a Buy rating and a $108 price target, pointing to the possibility that BJ's could speed up new club openings. The current plan calls for 25 to 30 clubs across 2027 and 2028.

why it matters

For markets, the story shows how warehouse clubs can benefit from consumers hunting for deals amid elevated gasoline prices and higher interest rates. Barron's cites a forward price-to-earnings ratio of 21 for BJ's, compared with 39 for Walmart and 44 for Costco. These figures compare valuations as reported and are not a forecast of share price movement.

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