UBS Remains Sidelined on Bed Bath & Beyond (BBBY) Following 4Q Results
UBS reiterated a Neutral rating and $52.00 price target on Bed Bath & Beyond (NASDAQ: BBBY) following the company's 4Q earnings report. 4Q EPS of $1.85 exceeded the consensus forecast. BBBY also reported comps of 1.7%, beating street estimates of 0.8%.
Analyst Michael Las commented, "The company's 1.7% comp beat our forecast of 1.0% and the cons. est. of 0.8% (guidance 0-2%). Notably, its 4Q comp implies ~400 bps of sequential acceleration on a 2-yr stack to 5.4%. While, its eCommerce segment grew 25%+ in the period, its store comp was relatively flat highlighting continued difficulty driving additional footsteps. That said, this trend improved a bit compared to 3Q (LSD decline). BBBY continued its aggressive repurchase posture, reducing its share count by ~11% YoY. It also instituted a dividend program with the first payout in 1Q'16. Though, it's been seen time and again in hardline retail that capital return alone is not a sufficient condition for making shares move higher over the long run. There remain several points of uncertainty with its FY'16 guidance implying yet another year of material margin contraction. This will probably cap any upside on its shares in the NT."
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Shares of Bed Bath & Beyond closed at $48.81 yesterday.