Shares of BJ's Wholesale Club Holdings Inc. (BJ) - Get Report  rose 2.8% to close at $25.28 Tuesday after Wells Fargo upgraded the warehouse club operator to outperform from market perform  raised the price target to $29 from $24 a share.

Analyst Edward Kelly said he saw "numerous developing factors that make the name an attractive investment idea for 2019."

"While concerns about sluggish comps and general skepticism have held us back, growing confidence in the near-term story (stoked in part by our recent management meeting), the ever-present allure of the turnaround opportunity, and its defensive positioning have aligned to raise our optimism," Kelly said.

While the story is not perfect, Kelly said that the upside potential in the Westborough, Massachusetts-based company outweighs the downside.

BJ's Wholesale Club Holdings was publicly traded until 2011, when private-equity firms Leonard Green & Partners L.P. and CVC Capital Partners took the company private in an all-cash deal valued at about $2.8 billion that saddled the company with more than $2 billion in debt. Last year, the completed its initial public offering and returned to the public markets.

In November, BJ's Wholesale Club said third-quarter sales increased 4.3% to $3.2 billion. Chairman and CEO Christopher J. Baldwin said in a statement at the time that "we continue to execute against our strategic priorities and have now delivered eleven consecutive quarters of improved profitability and five quarters of positive comp sales." 

"We are still in the very early stages of our transformation and have significant opportunities ahead," Baldwin said in the statement. "We are optimistic our approach will deliver benefits to our members, shareholders and team members over the long term."