J.P. Morgan Upgrades Big Lots To 'Overweight'

CHICAGO (AP) — Big Lots Inc. is among the retailers best positioned to benefit as consumer spending rebounds, an analyst said Thursday as he upgraded the discount chain.

J.P. Morgan analyst Charles Grom raised his rating on the Columbus, Ohio-based company to "Overweight" from "Neutral."

"We believe (Big Lots) is one of the best positioned names in our space to rally in concert with improving customer propensity to spend," Grom wrote in a research note, adding that a wide range of merchants have noted increasing sales trends during the third quarter, particularly for home goods and furniture. "... A rising tide (eventually) lifts all boats."

Grom said he believes Big Lots will also fare better than its competitors in the second half of the year. That's because of the company's efforts around improving stores, the creation of a loyalty card program for shoppers and the benefits it will may reap during the holiday shopping period because of the wide range in merchandise it stocks on its shelves.

Grom also boosted is third- and fourth-quarter profit forecast for Big Lots, saying he expects the retailer to earn 18 cents per share in the third quarter and $1.04 per share in the all-important fourth quarter.

That compares with Wall Street estimates of 17 cents per share in the third quarter and $1.03 per share in the fourth.

Big Lots shares rose 45 cents, or 1.8 percent, to $25.47 in midday trading Thursday.