Current global supply chain disruptions have been causing companies great distress. For instance, retailers are struggling to keep up with surging consumer demand ahead of the holiday season. And because supply chain disruptions are not expected to ease anytime soon, we think fundamentally weak retail stocks Wayfair Inc . (NYSE:W) and Bed Bath and Beyond (BBBY) are best avoided now. Indeed, wall Street Analysts have recently downgraded these stocks because they look overvalued at their current price levels. Read on.The COVID-19 pandemic-induced limitations caused industry shutdowns worldwide last year. But as constraints eased this year with solid progress on the vaccination front, an unexpected increase in demand has wreaked havoc on manufacturers and distributors, whose production now lags pre-pandemic levels for several reasons, including labor shortages, and supply chain disruptions.
Supply chain bottlenecks and production system blockages have negatively impacted several industries, leading to panic overordering by retailers and manufacturers, exacerbating the supply chain crisis.
Wayfair Inc. (W) and Bed Bath and Beyond (BBBY) are among the retail giants whose shares have tanked on the ongoing supply chain disruptions because investors expect their financials to be impacted in the near term. Analysts have recently downgraded these stocks. Hence, we think these stocks are best avoided now.