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Another analyst turns bearish on the home-goods retailer.
Luke Sharrett/Bloomberg
Shares of
Bed Bath & Beyond
have risen for 14 of the past 15 trading days. That didn’t dissuade another analyst from turning bearish on the home-goods retailer.
Shares of
Bed Bath
(ticker: BBBY) rose as much as 79% on Tuesday for the stock’s second-best intraday gain on record. At last check, the stock was up 60% to $25.58. It has posted its best five-day stretch since the five days ended Jan. 27, 2021. Even more notably, the stock has jumped more than 400% since July 16, and has gained more than 500% from its 52-week closing low of $4.47 on July 6.
There was no news surrounding the stock’s jump on Tuesday. It’s simply become a favorite of the retail crowd.
Bed Bath has witnessed a sales decline as inflation forces consumers to focus spending on necessities. Barron’s previously listed Bed Bath as one of seven companies worth watching because of its need to refinance debts or borrow more.
That’s not stopping retail investors from jumping in headfirst. Bed Bath saw more than 167.6 million shares traded Tuesday, a record one-day volume for the stock.
B. Riley analyst Susan Anderson downgraded Bed Bath to Sell from Neutral on Tuesday and left her 12-month price target unchanged at $5.
“We believe that current valuation is unwarranted and remain on the sidelines as Bed Bath is facing fundamental issues with its business including declining liquidity and concern around the upcoming August 2024 $300 million note with approximately $285 million left to repay,” Anderson wrote.
Anderson added that she expects investors will be focused on sales trends throughout the quarter as the company “increased their marketing efforts including introducing a new loyalty awards program, updates around potential sale of the Baby business, liquidity management, inventory management, updates around a shareholder letter suggesting BBBY renegotiate the terms of their debt, updates on the CEO search, and expectations for the rest of the year.”
Baird analyst Justin Kleber cut his rating on Bed Bath to Underperform earlier this month, while maintaining a $4 price target.
Of the 19 analysts surveyed by FactSet, 58% have a Sell rating on the stock, 37% rate it at Hold and only 5% rate it as a Buy.
Write to Angela Palumbo at angela.palumbo@dowjones.com
