Bank of America has improved Bed Bath & Beyond Inc. BBBY, + 2.03% to buy from neutral now that the recent short contraction has ended and stocks are pulling back. Bank of America has lowered its price target to $ 38 from $ 55. Shares in Bed Bath & Beyond fell 5.4% in Thursday’s trading and have fallen more than 22% so far this month.
Bed Bath & Beyond got caught up in GameStop Inc. GME, + 2.54% from the short squeeze frenzy just a couple of weeks ago, with the stock surging as much as 96% in four days. See: It‘s Not Just About GameStop – Here are some of the other shorted stocks that skyrocket with the stock price retreating and analysts may refocus on the health of the business, analysts led by Curtis Nagle say The company’s steps to prepare for growth in 2021. Among those changes are: closing more than 100 underperforming stores with a total of 200 store closings planned by year-end; divestment of non-core assets, such as Cost Plus World Market; and develop their digital capabilities. “Bed Bath & Beyond has a host of growth initiatives and margin drivers in the works that we believe are not yet fully appreciated or believed,” analysts said. Store remodels, profitable sourcing and more private label products are on the way, analysts say. With former Target Corp. TGT, + 0.54% executive Mark Tritton at the helm, Bed Bath & Beyond has unveiled a transformation plan in recent months. This will help Bed Bath & Beyond gain relevance and grow the business, says Bank of America. “Unlike Gamestop, which experienced a much more extreme rise and fall in share prices due to price declines and great retail enthusiasm, we believe that a real fundamental shift is in the making at Bed Bath & Beyond,” wrote the reviewers. analysts. Also: the ‘new normal’ is more likely to grow as vaccine acceptance increases and stimulus spending increases – Stifel data “Competition and stock loss reversal over the years will not be easy for Bed Bath & Beyond. However, you don’t have to worry about your underlying market moving to a place where you simply won’t be able to establish a meaningful presence, such as Gamestop, as console game distribution is shifting to Xbox digital networks and PlayStation. “Shares in Bed Bath & Beyond have rallied 138.8% over the past year, outperforming the S&P 500 SPX Index, + 0.47%, which has risen 16.4% over the period.