BJ Should I Buy
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BJ's Wholesale Club Holdings Inc is not a strong buy at the moment for a beginner investor with a long-term strategy. The stock faces significant headwinds, including declining analyst sentiment, hedge fund selling, and mixed financial performance. While the technical indicators show some positive momentum, the lack of strong proprietary trading signals and the presence of competitive pressures make it prudent to hold off on investing right now.
The stock shows some positive momentum with a positively expanding MACD histogram (0.508) and RSI at 67.066, which is in the neutral zone. The stock is trading near its resistance level (R1: 101.465), indicating limited immediate upside. Moving averages are converging, suggesting no clear trend direction.
The company's revenue grew by 4.88% YoY in Q3 2026, and its membership gains and store expansion plans remain intact. Additionally, the options market shows bullish sentiment.
Analysts have downgraded the stock multiple times recently, citing competitive pressures, food inflation, and limited growth in core regions. Hedge funds are selling heavily, with a 145.14% increase in selling activity over the last quarter. Financial performance shows declining net income (-2.37% YoY), EPS (-1.71% YoY), and gross margin (-0.84% YoY).
In Q3 2026, BJ's Wholesale reported revenue growth of 4.88% YoY to $5.35 billion. However, net income declined by 2.37% YoY to $152.05 million, and EPS dropped by 1.71% YoY to 1.15. Gross margin also declined slightly to 18.97%, indicating some pressure on profitability.
Analyst sentiment has turned negative recently. Goldman Sachs maintains a Buy rating but lowered its price target to $123 from $139. Jefferies, Barclays, and Melius Research downgraded the stock to Hold or Underweight, citing competitive pressures, food inflation, and execution risks. Price targets have been revised downward, with the lowest being $90.
