Big Lots downgraded to Underweight from Neutral at Piper Sandler

Piper Sandler analyst Peter Keith downgraded Big Lots to Underweight from Neutral with a price target of $7, down from $12. Demand for both home furnishings and mattresses has deteriorated since March and will likely remain challenged in the months ahead, the analyst tells investors in a research note, citing the firm’s furniture retailer survey. Piper expects significant pressure on Big Lots’ sales and says meaningful spending cuts at this point seem limited without jeopardizing future growth. With continued weakness in sales, Big Lots’ free cash flow could go negative, thereby placing the dividend at risk, it contends.