Bed Bath & Beyond (BBBY) PT Lowered to $3 at Telsey

Telsey analyst Cristina Fernandez lowered the price target on Bed Bath & Beyond (NASDAQ: BBBY) to $3.00 (from $6.00) while maintaining a Underperform rating.

The analyst commented, "The worsening financial position, uncertain economic environment, leadership overhaul, poor execution, and lack of clear strategy keep us cautious on the stock. A large part of the prior strategy had been rolling out private brands (~25% of sales vs. 10% in 2020) and remodeling stores. However, private brands will be rolled back and store remodels are on pause, with more store closures likely to be announced. In addition, the cash position has deteriorated to $107MM at the end of 1Q22 vs. $440MM at the end of 4Q21, leaving little margin for error and causing the company to pull back on investments and tap its revolver. As such, we maintain our Underperform rating and are lowering our 12-month price target to $3 from $6, based on applying an EV/Sales multiple of 0.25x to our 2023 sales estimate of $6.07B. We had previously valued the company using an EV/EBITDA multiple, but with negative EBITDA projections view EV/Sales as more appropriate."

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