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Big Lots shares climb after upgrade

An analyst upgraded shares of closeout department store chain Big Lots Inc. Wednesday, saying the retailer is poised to produce better profits during the fiscal year.
/ Source: The Associated Press

An analyst upgraded shares of closeout department store chain Big Lots Inc. Wednesday, saying the retailer is poised to produce better profits during the fiscal year.

Raymond James analyst Dan Wewer boosted his rating on the company to "strong buy" from "outperform."

"Big Lots is one of the few retailers with the potential to generate positive mid-single-digit (sales in stores open at least a year) and mid-teen (earnings per share) growth," Wewer wrote in a research note published Wednesday.

He said the retailer has been able to attract more shoppers by tweaking the inside of its stores and its merchandise, particularly in its home, furniture, electronics and toy departments.

It's also benefited as consumers begin spending more when they shop.

He maintained his forecast that Big Lots will earn $2.29 per share when it reports full-year results, likely in March.

For the next fiscal year, he expects it to earn $2.58 per share.

Analysts surveyed by Thomson Reuters expect Big Lots to earn $2.19 per share in its current fiscal year and $2.45 per share the following year.

Big Lots shares rose 96 cents, or 3.2 percent, to close at $31.17 Wednesday after hitting a 52-week high of $31.21 earlier in the session.