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Loop Capital analyst Anthony Chukumba reiterated a Sell rating and a $1 per share price target on Bed Bath & Beyond (NASDAQ:BBBY) following the latest Amazon (NASDAQ:AMZN) pricing study.
The analyst said that the company’s price gap with Amazon “widened slightly after narrowing in our two previous analyses.”
“BBBY’s prices were 3.4% more expensive than Amazon’s on average, as compared to 2.5% more expensive in April. BBBY’s prices were more expensive than Amazon’s on 72% of the items in our market basket (as compared to 64% in April); less expensive on 8% (as compared to 0% in April); and the same on 20% (as compared to 36% in April),” Chukumba said in a client note.
Moreover, the analyst noted that the company is still having a heightened promotional cadence, which suggests BBBY will deliver “another quarter with a substantial top-line decline, YoY gross margin deterioration, SG&A expense deleverage, and negative free cash flow.”
Net-net, Chukumba remains to be extremely bearish on BBBY stock and sees the current consensus estimates as “far too optimistic.”
BBBY stock price is up nearly 1% today.