Why Big Lots (BIG) Shares Are Gaining Today

NEW YORK (TheStreet) -- Big Lots (BIG) was gaining 2% to $37.96 Monday after KeyBanc upgraded the retailer to "buy" from "hold."

The bank set a price target of $45 for the company. Analyst Bradley B. Thomas wrote that Big Lots is gaining traction on several turn around initiatives thanks to new president and CEO David Campisi.

"Mr. Campisi is implementing an "Edit to Amplify" strategy to improve stores' shoppability for "Jennifer," its core customer," Thomas wrote. "While this strategy is overarching and likely to be the most important earnings lever for BIG in the coming years, our analysis suggests investors receive this effort as a "call option," as several other initiatives have the potential to double earnings on their own. First, BIG is exiting Canada, eliminating its drag on earnings and focusing management's time on the core business. Additionally, BIG plans for continued share repurchases, supported by its strong FCF outlook. The addition of freezers/coolers and expansion of furniture financing are both positioned to drive sales and EPS."

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TheStreet Ratings team rates BIG LOTS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate BIG LOTS INC (BIG) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

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