FUTU, BJ, MLCO Stocks Hit 52-Week Lows Last Week: What's Driving The Selloff?

• Futu shares fell after Chinese regulators proposed a $271 million penalty for allegations of unlicensed operations. 
• BJ’s Wholesale Club stock dropped 8.3% despite beating Q1 estimates, as weak core sales growth and margin pressure hurt sentiment. 
• Melco Resorts' stock hit new yearly lows on weak Q1 earnings. 

Futu Holdings (FUTU), BJ’s Wholesale Club (BJ) and Melco Resorts & Entertainment (MLCO) all dropped to fresh 52-week lows on Friday as investors aggressively sold companies facing regulatory, margin and operational concerns. 

The reaction highlighted growing investor skepticism toward companies posting strong headline numbers while underlying business pressures raise concerns. While Futu and BJ’s Wholesale Club stocks slumped over 27% and 8%, respectively, Melco Resorts stock edged 0.5% lower. 

FUTU Faces Regulatory Shock

Futu Holdings shares fell to a 52-week low of $80.50 after China’s securities regulator accused the company of operating without proper licenses in mainland China. Regulators also proposed a $271 million fine and told the company to shut down its mainland-focused apps and platforms. 

On Monday, Goldman Sachs analyst Shuo Yang downgraded Futu shares to ‘Neutral’ from ‘Buy’ while slashing the firm’s price target to $102.13 from $210.47 due to rising uncertainty around China’s regulatory actions and the financial costs of meeting compliance requirements. 

Futu Holdings operates a digital brokerage and wealth management platform across eight global markets from its Hong Kong headquarters. On Stocktwits, retail sentiment around the stock remained in ‘extremely bullish’ territory. 

BJ’s Earnings Beat Fails To Impress

BJ’s Wholesale Club stock fell 8.3% despite posting fiscal first-quarter (Q1) revenue and earnings above analyst estimates. Investors instead focused on slowing demand for core merchandise and weaker profitability trends.

Excluding fuel sales, comparable sales rose only 1.5% during the quarter. Higher gas prices brought more customers to BJ’s fuel stations, but investors worried those visits did not lead to stronger in-store shopping. 

Merchandise margins also declined by 10 basis points as the retailer increased promotions to compete with rivals such as Walmart (WMT) and Costco Wholesale (COST).

However, retail sentiment around the stock remained in ‘extremely bullish’ territory. 

MLCO Struggles With Casino Costs

Melco Resorts & Entertainment also slid to new yearly lows as the weakness from poor Q1 earnings spilled over. In late April, the company reported Q1 earnings of $0.07 per share, missing the analysts’ consensus estimate of $0.09, according to Fiscal AI data. 

Investors were concerned about higher labor and marketing costs, as well as intense competition in Macau’s high-end casino market. Casino companies are spending more on promotions and customer incentives, which is hurting profits across the industry.

Retail sentiment around the stock changed to ‘bullish’ from ‘extremely bullish’ territory the previous day. 

So far this year, FUTU and MLCO stocks have plunged 45% and 29%, respectively, while BJ stock has shed 3%. 

Also See: What’s Hurting BJ Stock? Wall Street Points To Gas Costs, Margin Squeeze, Weak Consumer

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