Bed Bath & Beyond Inc. (NASDAQ:BBBY) Sheds 12%

Posted by admin January 10, 2014 0 Comment 823 views

The S&P 500 index tracked home servicing store major Bed Bath & Beyond Inc. (NASDAQ:BBBY) which has amassed a market cap of $16.9 billion lost close to 12.46 percent during trading yesterday. When markets closed for the day, the share price had settled at $69.75 per share, which is 13.7 percent above its 52 week high price point. The deluge was triggered by rating agency Credit Suisse downgrading the stock yesterday. The downgrade follows the lower than expected revenue and sales results which were announced by the firm from its third quarter operations. Yesterday’s loss was in addition to 12.85 percent decrease in its market value during trading in last week’s trading.

Analysts Unimpressed

Citing the low sales growth, next to negligible growth in the sales floor area and a continued decrease in the earnings per share on a quarter on quarter basis, analysts at Credit Suisse pegged the price target of the stock down to $78 per share. Thanks to the uninspiring results, a host of rating agencies have advised their investors to go slow in acquiring the stock. While UBS and Canaccord Genuity yesterday recommended neutral ratings, Telsey Advisory group did not rate the stock at all.

Third Quarter Results

The disappointment shown by analysts and investors alike was due to the fact that Bed Bath & Beyond Inc. (NASDAQ:BBBY) reported net income of $237 million, which translated into a $1.12 earnings per share. This was well below the consensus among 24 analysts polled prior to the earnings call, which had predicted earnings to come in at $1.16 per share. Even more disappointing for the share holders was the fact that it’s forecast for the fourth quarter was also lesser than analyst estimation of $1.79 per share. The company had forecast ed EPS to come in between $1.6 and $.167 per share.

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