Companies and Brands
A Rare Downgrade For Bed Bath & Beyond (BBBY, BBY, AMZN)
Published:
Last Updated:
Bed Bath & Beyond Inc. (NASDAQ: BBBY) is facing an unusual call this morning. Canaccord Genuity has downgraded the rating to “Hold” from “Buy.”
The team noted, “We calculate that BBBY’s market share declined in Q4 for the first time this decade, and we expect a deceleration of top- and bottom-line growth in FY12 and beyond. We believe the company is vulnerable to market share losses given its meager online presence at 1%-2% of total sales. The consolidation of the company’s ancillary support offices into its corporate headquarters presents a potential near-term disruption given headcount reduction within BBBY’s strong merchandising group.
The call also stems around valuation as well. The team here noted the belief that shares are fairly valued at 15-times the firm’s 2012 earnings estimate and 8-times expected enterprise value over EBITDA.
Lastly, the firm expects a slowing of sales growth. Canaccord’s team noted that its expected sales and earnings will increase at five-year consolidated growth rates of 6% and 13%, respectively. That is under the five-year average growth rates of 8% and 16%.
This is one of those downgrades which may seem more like a peaking of the model more than a problem inside the stores. Still, with the loss of market share it might make you wonder if Bed Bath & Beyond faces the same challenges that Amazon.com, Inc. (NASDAQ: AMZN) and other online efforts pose against Best Buy Co., Inc. (NYSE: BBY). It may be a bit premature to make that call, but that is what it sounds like.
JON C. OGG
The Average American Has No Idea How Much Money You Can Make Today (Sponsor)
The last few years made people forget how much banks and CD’s can pay. Meanwhile, interest rates have spiked and many can afford to pay you much more, but most are keeping yields low and hoping you won’t notice.
But there is good news. To win qualified customers, some accounts are paying almost 10x the national average! That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 3.80% with a Checking & Savings Account today Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.
Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 4.00% with a Checking & Savings Account from Sofi. Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.