Bed Bath & Beyond Inc. is reaping the rewards of an ongoing turnaround, but analysts say the company is also getting a boost from a coronavirus-impacted environment that has been favorable to the home space.
Bed Bath & Beyond (BBBY) shares are soaring after second-quarter earnings beat expectations, with the company reporting the first same-store sales increase since 2016 (link). Shares were up nearly 9% in Friday trading, and have rallied more than 40% for the week.
Many research groups have raised their price target on Bed Bath & Beyond shares.
But UBS says the results need to be put in the context of a strong home furnishings category.
“It’s clear to us that the rising tide is lifting all boats,” analysts led by Michael Lasser wrote. “However, Bed Bath & Beyond also executed more effectively to take advantage of this tailwind.”
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UBS rates Bed Bath & Beyond shares neutral with a $20 price target, up from $13.
“While we are impressed by the progress made, clearly the environment is helping with many of Bed Bath & Beyond’s key categories,” wrote JPMorgan analysts in a note. “This suggests ongoing share loss and there remains a lot of work to fix the company’s operating foundation while the COVID-induced nesting lap looms. As such, we remain neutral.”
JPMorgan moved its price target to $21 from $10.
Prior to the earnings announcement, retailers across the home design, home goods, and home improvement space were experiencing high demand from consumers who are spending more time in their houses due to the pandemic.
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RH (RH) was upgraded last week (link) on analyst expectation that high-end home