Shares of Bed Bath & Beyond are plunging more than 15% on Wednesday after the retailer announced disappointing quarterly results.
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CREDIT SUISSE: It’s 'difficult to see light at the end of the tunnel' for Bed Bath & Beyond (BBBY)
The Swiss bank cut its price target for Bed Bath & Beyond stock after disappointing earnings from the home goods retailer.
The home furnishings chain reported earnings of $0.67 a share, well shy of the
Bed Bath & Beyond is certainly not alone in its struggles as companies across the country are having difficulty keeping up with Amazon.
In a note to clients on Wednesday, Credit Suisse warned that "it's difficult to see light at the end of the tunnel."
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"Price and service gaps remain, the assortment advantage is less clear today, investments likely need to continue, and sector has yet to reach an equilibrium from a supply/demand perspective," analysts Seth Sigman, Kieran McGrath, and Lavesh Hemnani wrote.
The Swiss bank cut its price target for Bed Bath & Beyond from $33 to $25, just below Wall Street consensus of $26.28, according to Bloomberg.
In its earnings call, Bed Bath & Beyond said that restructuring changes, Hurricane Harvey, and a new accounting standard contributed to the losses.
Credit Suisse thinks the magnitude of the miss could actually create new opportunities for the company to make positive strategic changes. The bank complimented Bed Bath & Beyond's ramping up of its online business, which still only accounts for 15% of total sales.
"In theory, the investments needed in technology, price, and marketing are best done outside of the public eye. But, leverage is not as low as its been," the bank said.More importantly, for retailers that don't own their own brands, the scenarios have become more limited."
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