1Q EPS: Membership Growth & Digital Momentum; Margin Investment In Focus

Research evidence excerpt

1Q EPS: Membership Growth & Digital Momentum; Margin Investment In Focus

TD Cowen BJ's Wholesale Club Holdings

Global Research May 22, 2026

VALUATION METHODOLOGY AND RISKS

Valuation Methodology

Broadlines:

Our valuation methodology is primarily based on Price-to-Earnings (P/E), supplemented by,

in some cases, Enterprise Value to EBITDA (EV/EBITDA) and Price-to-Free Cash Flow (P/FCF)

ratios and DCF analysis. We may also use Enterprise Value to Revenue (EV/Revs) for companies

operating at depressed levels of profitability. In some cases we use probability-weighed,

scenario-based decision trees as a basis for devising our price targets. We incorporate the

company’s and its peers’ historical and current valuation multiples, as well as our analysis of

future growth rates, company-specific risks, return on invested capital, and other inputs from

our research when devising our valuation multiples and the probabilities we assign to different

scenarios when developing our price targets.

We make investment recommendations on certain early stage, pre-revenue companies based

upon an assessment of their business model, technology, probability of market success,

and the potential market opportunity, balanced by an assessment of applicable risks. Such

companies may not be assigned a price target.

Investment Risks

Risks to the companies in our sector include risks and uncertainties associated with the global

economic environment and consumer spending, as well as competition within consumer

and fashion products industries and fluctuating consumer demand trends, which can create

variability in sales and margins. Increases in the prices of raw materials, rent, freight, labor,

tariffs, or manufacturers’ inability to produce goods on time or to specifications may negatively

impact results.