BIG - Big Lots: Avoid The Stock As Turnarounds In Retail Are Tough

2024-02-09 00:50:29 ET

Summary

• Big Lots shares have dropped by nearly 90% over the past three years due to the weak financial performance of the underlying business.
• The company is currently in the midst of executing a turnaround plan but is not expected to be profitable over the next two years.
• Turnarounds in the retail sector tend to be particularly challenging.
• BIG has a highly levered balance sheet which results in a thin margin of error for the turnaround plan.
• I rate BIG a Sell.

Shares of Big Lots ( BIG ) have fallen by nearly 90% over the past three years as the company has struggled to deliver consistent profitability.

The company is not expected to deliver full-year profitability in FY 2024 or FY 2025. Despite this, the stock is currently rated a Buy by Seeking Alpha analysts and a Hold by Wall Street analysts....

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