UBS Reiterates Buy Rating on Bed Bath & Beyond (BBBY)
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UBS reiterated a Neutral rating and $47.00 price target on Bed Bath & Beyond (NASDAQ: BBBY). UBS is skeptical as to the 2Q being the quarter to mark the company's turnaround.
Analyst Michael Lasser commented, "While 2Q marked the entry of One Kings Lane to the fold, we don’t think BBBY's core trends improved much. Reads from WSM, RH, & PIR (all reported a decel in SSS) highlight 2Q was tough for the sector. In addition, competitive intensity increased significantly this Q. We model a -0.5% comp for BBBY, which equates to a -150 bps decel on a 2-yr stack (cons 0.4%). Memorial Day falling in 2Q this year likely provided some help. Its eComm channel also probably continued to grow (unique visitors to its website grew 12% YoY in 2Q vs 22% YoY in 1Q). However, soft traffic likely weighed on its store sales. Further, our est. implies BBBY underperformed Census Bureau HF retail sales by -360 bps in 2Q (vs. -400 bps avg in the past 8 Qs). Unless its share losses moderate, it's tough to see the stock climbing meaningfully from current levels."
Shares of Bed Bath & Beyond closed at $43.10 yesterday.
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