Bed Bath & Beyond stock jumps 19% after CEO news

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Bed Bath & Beyond upgraded two days before earnings, shares soar

Bed Bath & Beyond Inc. stock soared 5.2% in Monday trading after the home retailer was upgraded to outperform from neutral at Wedbush. Analysts moved the price target to $16 from $14. Wedbush says it expects earnings to stabilize, or even grow, over the next two years as changes are made, including store remodels, private-label brand launches, and the sale of non-core assets and real estate. “Cost Plus World Market the most likely near-term candidate worth ~$250m or $2.00 per share,” Wedbush wrote. “In fact, our work indicates that the value of the company’s real estate and non-core assets are worth $1.7 billion, nearly equivalent to the company’s $1.8 billion enterprise value, meaning you almost get the company’s core Bed Bath business for free.” Moreover, Wedbush also thinks the company could name a new chief executive along with second-quarter earnings, scheduled for Wednesday. FactSet is guiding for earnings of 27 cents per share, down from 36 cents last year, and sales of $2.75 billion, down from $2.94 billion in 2018. “That said, second-quarter results are likely to fall short of consensus expectations that are not aligned with company guidance, and 2019 guidance could be withdrawn as the company clears inventory, digests list 4 tariffs and gives the new CEO time to evaluate the business,” the note said. Bed Bath & Beyond stock is down 8% for the year to date while the S&P 500 index is up 18.7% for the period.

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