Wedbush Neutral On Big Lots

Wedbush is out with a research report on Big Lots BIG and it has a Neutral rating and a $32 price target on shares. In a note to clients, Wedbush writes, "We maintain our NEUTRAL rating based ongoing fundamental merchandising issues which are weighing on performance. The stock is trading at 10.9x our 2011 forecast, which is below its 5-year average of 13x and the current peer-group average of 15x. Sentiment has been negative recently due to slowing momentum in the business, including on sales and gross margin. Although the consumables business began in 1H to reverse recent declines, other categories continue to lag, including hardlines, toys, and apparel. While the company has had some lumpy sales in certain merchandise categories, we note that comparisons do get easier heading into 2H and the valuation is looking more attractive." Shares of BIG gained $1.26 yesterday to close at $31.35, a gain of 4.19%.