By Sam Boughedda
Bed Bath & Beyond Inc (NASDAQ:BBBY) price target was cut to $5.50 from $6 by KeyBanc analyst Bradley Thomas on Tuesday.
Bed Bath and Beyond is set to report earnings on Wednesday, and the analyst feels a fair amount of negativity is priced into near-term results. The stock is down more than 55% in 2022.
Thomas, who has an Underweight rating on the stock, said "checks and proprietary data point to continued challenges."
"Our channel checks, proprietary Key First Look Data, and geolocation data continue to imply that BBBY has the weakest spending trends within our coverage—all included in this report. The company remains focused on expanding owned-brand sales penetration, reducing sourcing and vendor costs, remodeling storefronts, and optimizing BBBY's portfolio," wrote the analyst.
KeyBanc feels the fundamental outlook for the company remains challenged, with Bed Bath and Beyond most recently citing headwinds that include a lack of inventory availability, higher supply chain-related costs, and fleet optimization activity negatively impacting core sales.
"We believe deteriorating consumer confidence and a shift in consumer behavior away from discretionary items present additional risk to BBBY's 1Q (and 2022) results," added Thomas. "For 1Q, we continue to forecast a -20% comp decline and sequential deceleration of ~12% as referenced in our proprietary Key First Look Data (vs. Street expectations of -20.3%). We think the key factor is that sales seem to have stayed soft through 1Q and into 2Q, despite tougher stimulus comparisons being behind us."