Deutsche Bank Offers Insight into Bed Bath and Beyond (BBBY) Ahead of Earnings, Sees Upside
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Price: $4.35 -2.03%
Rating Summary:
4 Buy, 17 Hold, 14 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
4 Buy, 17 Hold, 14 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Deutsche Bank is maintaining its Hold rating and $55 price target on shares of Bed Bath and Beyond (NASDAQ: BBBY) as the company is expected to report its Q1 earnings tomorrow.
The firm forecasts Q1 EPS of $0.60 and comp sales up 5 percent, which is mixed with the Street's estimates of $0.62 and 4.5 percent, and the company's guidance of $0.58-$0.61 and 2-4 percent.
Last quarter BBBY reported comp sales up 8.5 percent while industry sales data fell 1.3 percent. With the industry showing growth of 1.4 percent this quarter the company should have no trouble reaching its 8.5 percent from last quarter and may even be higher as comparisons are 300 bps easier. Every additional percent added to comp sales, adds $0.01 to the company's EPS.
Deutsche Bank looked back over the past 37 quarters in which BBBY posted earnings and found that they beat the Street on average by 9 percent or $0.04. The biggest upside usually appears in the first quarter with an on average beat of 11 percent.
Currently BBBY is trading at 14.9x and 13.4x the firms FY12 and FY13 forecasts of $3.39 and $3.91.
An analyst at Deutsche Bank comments, "We estimate BBBY’s long term EPS growth rate at 12% compared to the hardline average of 13%, mostly due to limited margin expansion from an already high level. Therefore, we base our $55 price target on 14x our 2012 forecast, implying a PEG of 110%, in line with the long term hardline average. We think the biggest risks are slowing consumer spending and exposure to housing markets."
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 $52.59 yesterday.
The firm forecasts Q1 EPS of $0.60 and comp sales up 5 percent, which is mixed with the Street's estimates of $0.62 and 4.5 percent, and the company's guidance of $0.58-$0.61 and 2-4 percent.
Last quarter BBBY reported comp sales up 8.5 percent while industry sales data fell 1.3 percent. With the industry showing growth of 1.4 percent this quarter the company should have no trouble reaching its 8.5 percent from last quarter and may even be higher as comparisons are 300 bps easier. Every additional percent added to comp sales, adds $0.01 to the company's EPS.
Deutsche Bank looked back over the past 37 quarters in which BBBY posted earnings and found that they beat the Street on average by 9 percent or $0.04. The biggest upside usually appears in the first quarter with an on average beat of 11 percent.
Currently BBBY is trading at 14.9x and 13.4x the firms FY12 and FY13 forecasts of $3.39 and $3.91.
An analyst at Deutsche Bank comments, "We estimate BBBY’s long term EPS growth rate at 12% compared to the hardline average of 13%, mostly due to limited margin expansion from an already high level. Therefore, we base our $55 price target on 14x our 2012 forecast, implying a PEG of 110%, in line with the long term hardline average. We think the biggest risks are slowing consumer spending and exposure to housing markets."
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 $52.59 yesterday.
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