FBR Capital Upgrades Bed Bath and Beyond (BBBY) to Market Perform; Adjusting Estimates

FBR Capital upgraded Bed Bath and Beyond (NASDAQ: BBBY) from Underperform to Market Perform. PT $45.

FBR analyst says, "BBBY has underperformed the equity market YTD and, since 9/23/10, by roughly 900 bps. This excludes dividend assumptions, with no dividend yield for BBBY. Looking forward, rising YOY inventory acquisition costs are headwinds. Potential tailwinds are: (1) the possibility that the sector attempts to pass through rising prices and (2) the growth by BBBY of new retail concepts, which are accretive to sales and EBIT per square foot. All in, we feel that a Market Perform rating is better suited for the share price, with the stock close to a parity 2011E valuation with the S&P 500."

"We estimate 4Q10 EPS of $1.00, and this compares with the Street estimate
of $0.97. We adjust our 2011E EPS estimate to $3.27, from $3.30, and this compares with the Street estimate of $3.34. For 2012, we adjust our EPS estimate to $3.64, from $3.69, which compares with the Street consensus estimate of $3.82."

For more ratings news on Bed Bath and Beyond click here and for the rating history of Bed Bath and Beyond click here.

Shares of Bed Bath and Beyond closed at $45.58 yesterday.

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