BJ’s Wholesale Club Holdings Inc (NYSE:BJ) is gearing up to be the largest IPO of the week.
The warehouse membership chain priced its 37.5 million shares at US$17, the high-end of its guidance, raising US$637.5mln.
Proceeds from the IPO will be primarily used to repay its debts, according to a Reuters report.
READ: IPO Roundup: BJ’s Wholesale Club set to be the largest IPO of the week
The shares opened at US$21.25, about 25% higher than its US$17 starting price. Following its market debut, the valuation of the company is around US$2.72bn.
The chain operates around 215 stores and has around 5 million members, paying around US$110 in annual fees.
Analysts weigh in on BJ’s Wholesale
Gordon Haskett has initiated coverage on the wholesale chain.
Analyst Chuck Grom has given the shares a Buy rating and price target range between US$22 and US$26, according to a note shared by the Fly.
The analyst sees merit in the warehouse club model and thinks that the chain’s new management team will help it to compete with other major players like Costco and Walmart’s Sam’s Club.
Shares of BJ’s jumped nearly 30% to US$21.50 in Thursday afternoon trading and continued climbing into Friday morning, up more than 6% to US$23.36.