Big Lots falls after Piper Sandler warns of sales pressure, cuts rating

Former BL Stores

21/04/2023 12:35

** Shares of discount store chain Big Lots Inc  BIG.N  down
5.8% at $9.17 premarket
    ** Piper Sandler downgrades BIG to "underweight" from
"neutral," cuts PT to $7 from $12 
    ** Brokerage cites industry view that demand for home
furnishings and mattresses deteriorated since March and will
likely remain challenged in months ahead
    ** Piper Sandler warns of "significant" pressure on sales at
BIG; adds that a sustained weakness in sales could limit free
cash generation, putting its dividend at risk
    ** "We now expect FCF to breakeven with more risk to the
downside than the upside" - Piper Sandler
    ** Meanwhile, "meaningful" SG&A cuts at this point seem
limited without jeopardizing future growth - brokerage says
    ** One of 10 brokerages rate stock "strong buy," 4 "hold"
and 5 "sell;" their median PT is $13.50
    ** Up to last close, stock had fallen ~34% YTD

 (Reporting by Ashwini Raj in Bengaluru)
 ((Ashwini.Raj@thomsonreuters.com))