Shares of Bed Bath & Beyond (ticker: BBBY) gained for 14 of the past 15 trading days. This, however, didn’t impress an analyst from turning bearish on the home-goods retailer.
The company’s shares climbed 79% on Tuesday for the stock’s second-best intraday gain on record. At some point, the stock had risen 60% to $25.58- posting its best 5-day performance since Jan 27, 2021. Even more surprising, the stock has gained over 400% since July 16 and has gained more than 500% from its 52-week closing low of $4.47 on July 6.
No ostensible reason was given to justify the stock’s meteoric rise; it simply gained favour among the retail crowd.
The double trouble brought on by inflation and lower consumer spending has seen the company’s stock decline, especially as consumers focus on necessities. However, this has not dimmed the stock’s shine as it continues to surprise the market.
B.Riley analyst Susan Anderson downgraded Bed Bath & Beyond from Neutral to Sell on Tuesday but left her 12-month price target of $5 unchanged.
“We believe the current valuation is unwarranted and remain on the sidelines as Bed Bath and Beyond is facing fundamental issues with its business including declining liquidity and concern around upcoming August 2024 $300 million note with approximately $285 million left to repay,” said Anderson.
Anderson went ahead to say that she expects investors to be focused on sales trends throughout the quarter as the company “increased their marketing efforts including introducing a new loyalty awards program, updates around the 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 year.”
Justin Kleber, a Baird analyst, lowered his price rating on the stock to Underperform while maintaining his $4 price target.
Of the 19 analysts surveyed by FactSet, 58% set a Sell rating on the stock, 37% rated the stock as a Hold, and only 5% rated it as Buy.
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