“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.
Online competitors such as Amazon.comare partially responsible for Bed Bath & Beyond’s recent loss of market share.
“Online competitors in general will likely take share from Bed Bath in the near term,” Champine said. But she urged investors to keep this in perspective: “We think Amazon did about 200 million last year in home furnishings, but Bed Bath just did 2 billion this quarter.” Champine also mentioned discount stores, such as dollar stores and Wal-Mart Stores,as competitors.