Is Bed Bath & Beyond Worth Only $2 Per Share? Here's What 3 Analysts Are Saying

Zinger Key Points
  • Executive departures could make a company turnaround more complicated.
  • The value of Bed Bath & Beyond's buybuyBABY remains a key question in how much the stock could be worth.

Retailer Bed Bath & Beyond Inc. BBBY reported first-quarter earnings and the departure of its CEO Mark Tritton on Wednesday. The departure prompted a snarky response from Ryan Cohen, who is a large shareholder in the company.

Here’s what analysts had to say about the company’s earnings and the CEO leaving.

The Bed Bath & Beyond Analysts: Morgan Stanley analyst Simeon Gutman had an Underweight rating and lowered the price target from $7 to $2.

Telsey Advisory Group analyst Cristina Fernandez had an Underperform rating and lowered the price target from $6 to $3.

KeyBanc Capital Markets analyst Bradley Thomas had an Underweight rating and lowered the price target from $5.50 to $2.

Related Link: 'It's Game Over': Loop Capital Analyst Warns That Bed Bath & Beyond's Days Are Limited 

The Analyst Takeaways: A transformation by Bed Bath & Beyond is not gaining traction according to Morgan Stanley's Gutman, who sees further downside in the stock.

“The situation is now more precarious as not only is revenue declining but balance sheet and cash flow health have deteriorated as well, and it’s going to be tough to properly execute a turnaround,” Gutman said.

The analyst points to businesses that see increased management turnover during transformations, which make execution more complicated.

“The big question for the stock is the value of buybuyBABY as it appears the market is ascribing little to no (or even negative) value for Bed Bath.”

BuybuyBABY sells clothing, gear and other items for use with infants and young children and is owned by Bed Bath & Beyond. 

Gutman thinks there could be a potential value of $500 million to $600 million for the buybuyBABY brand, greater than the company’s current market capitalization.

Telsey's Fernandez calls the first quarter from Bed Bath & Beyond disappointing with a miss of sales and earnings per share estimates.

“(Bed Bath & Beyond) continues to face a more challenging consumer backdrop, lower demand for its key product categories, wider market share losses, and supply chain disruption,” Fernandez said.

The analyst also highlighted the company announcement about the departure of CEO Mark Tritton and Chief Merchandising Officer Joe Hartsig.

The company reported June comparable sales down 20%, a sign of the second quarter also being weak.

KeyBanc's Thomas saw that the company had significant challenges with inventory and supply-chain issues as headwinds.

“Looking ahead, management remains committed to the potential sale of its buybuyBABY banner. Aside from this potential catalyst, we ultimately believe fundamentals point to a lower share price,” Thomas said.

BBBY Price Action: Bed Bath & Beyond shares are down 2.99% to $4.84 on Thursday.

Photo: Sundry Photography via Shutterstock



Posted In: Bradley ThomasCristina FernandezKeyBancMark TrittonMorgan StanleyRetail StocksRyan CohenSimeon GutmanTelseyAnalyst ColorPenny StocksPrice TargetReiterationSmall CapAnalyst RatingsTrading Ideas

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.