Buy Bed Bath & Beyond for Long-Term Bet: Wedbush


© Reuters.

By Christiana Sciaudone

Investing.com —  Bed Bath & Beyond Inc (NASDAQ:) is cheap, and Wedbush says buy, assuming you can wait a few years for the pay off. 

Shares rose 7% after Wedbush added BBBY to the firm’s Best Ideas List, and lifted its price target to $18 from $15, StreetInsider reported. The shares are currently trading a little over $12.

“BBBY shares continue to trade at distressed levels despite the company turning the corner to positive comps in recent months and being on the cusp of a dramatic improvement in profitability,” Wedbush wrote. “Indeed, the company is poised to generate at least $700m of EBITDA in two-to-three years, yet its pro-forma enterprise value is only 2x that level.”

Bed Bath & Beyond has a path to nearly $850 million in earnings before interest, taxes, depreciation and amortization in 2022 using conservative estimates, and is not simply a beneficiary of the coronavirus-related demand surge, the analyst wrote, according to StreetInsider.      

Not many analysts agree with Wedbush’s argument. The stock has three buys, six holds and four sells, and an average price target of $9.75, according to analysts tracked by Investing.com.

 

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