Stock more than doubled in 3 days, even after another analyst bearish down, with stock price target 80% below current levels
Shares of Bed Bath & Beyond Inc. rose again on Tuesday as the retail crowd rekindled, with another Wall Street analyst warning that investors sell because of “unrealistic” valuations.
The stock BBBY, 58.31% before suddenly turning almost face up, was down 4% about a minute after the open. Mem stock rose 57.7% in very active afternoon trading, and has now more than doubled (138%) in three days. It has skyrocketed 450% in a span of 14 days, in which it has risen in 13 days.
Trading volume exploded to reach a record 188.3 million shares before noon eastern. The stock was halted twice due to volatility in morning trade.
b. Riley analyst Susan Anderson cut her rating to sell from neutral, confirming her $5 stock price target, which is down about 80% from current levels.
The downgrade comes after the home goods retailer reported “very weak” fiscal first-quarter results even after the stock (BBBY) skyrocketed, which led to the ouster of its chief executive officer, he said.
“BBBY has recently re-gained the attention of retail traders on the Wall Street Bets Reddit forum, which gained notoriety during the GameStop saga in January 2021,” Anderson wrote in a note to clients. “We believe that BBBY is currently trading at an unrealistic valuation.”
On a bright side, she said the rally could provide a “long-term lifeline” to the company, with former mem-stocks such as GameStop Corp. GME up 11.32% and AMC Entertainment Holdings Inc. AMC, 1.43%, used Wall Street Bets Boost to raise cash through at-the-money stock sales.
Anderson is the second analyst on Bed Bath & Beyond to turn bearish in the past week. Of the 19 analysts surveyed by FactSet, 11 now have the equivalent of a sell rating on the stock. Only one analyst is bullish and the other seven are neutral. The average stock price target is $3.49, which is 86% below current levels.
Also read: Bed Bath & Beyond stock snaps longest winning streak in 15 years after a Baird analyst suggested it was time to sell.
According to the latest exchange data, the number of short interest, or bearish bets on a stock, represents 47.2% of the public float, or shares available to the public for trading. This compares with 23.5% for GameStop and 18.4% for AMC.
Shares of Bed Bath & Beyond are up 73.1% but have lost 8.3% over the past 12 months. In comparison, the SPDR S&P Retail Exchange-Traded Fund XRT, is down 4.14%, 22.7% in the past year and the S&P 500 Index SPX, is down 0.30% by 4.1%.