UPDATE: Nomura Equity Research Reiterates Neutral Rating, Lowers PT on Bed Bath & Beyond
In a report published Friday, Nomura Equity Research reiterated its Neutral rating on Bed Bath & Beyond (NASDAQ: BBBY), but slightly lowered its price target from $66.00 to $65.00.
Nomura Equity noted, “Most of us are familiar with the effects of a hangover that comes from beer or wine. BBBY may be experiencing a coffee hangover. What we mean is SSS may feel a drag until the Keurig phenomenon rebases. Back in 2009 and 2010, BBBY represented 14% of GMCR sales. It declined to 11% in 2011. An omission from the latest filing tells us that GMCR sales to BBBY have begun to decelerate or even decline. Estimating comps ex-Keurig shows that BBBY comps would have matched peers‟ more closely over time. We trim our comp estimates to 3.0% (from 4.0%). BBBY shares could be ripe for outperformance starting in H2 2013. In addition, we think BBBY should begin to benefit from an improving housing environment. We are therefore reluctant to be overly concerned about BBBY‟s future. We maintain a Neutral rating and hope to find an even more attractive entry point over time.”
Bed Bath & Beyond closed on Thursday at $58.16.
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Tags: Nomura Equity Research