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Bed Bath & Beyond’sstock is up 41 percent over the past 12 months. It has doubled its return over the last five years. But its shares tumbled more than 15 percent Thursday following a weaker-than-expected profit outlook for the current quarter. Is this a minor hiccup or a long-term setback for the home furnishing store?
Brian Nagel, senior equity research analyst at Oppenheimer, had an $84 price target for the stock before the report. At this point, a 30 percent upside is needed to reach that target.
“My team and I trimmed the price target today to about $80, but we very much reiterate our ‘outperform’ rating,” Nagel told CNBC. “Bed Bath remains a very solid performer, and the company has shown an ability to quickly bounce back in the past.”
Laura Champine, a Canaccord Genuity analyst, is not anticipating a “bounce back” anytime soon.
“The real point to make is that there has been a change in trend,” Champine said. “Bed Bath has just reached a point where it is tough to grow from here.”
Canaccord Genuity lowered its Bed Bath & Beyond rating two months ago, when the company reported for the first time in its history a share loss in home furnishings for the February quarter. “That trend continued and it actually worsened in the May quarter,” Champine said.
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