This has all the markings of a typical story: a beloved business which failed to adapt in recent years, and had seen short interest spike in anticipation of its slow but inevitable demise. The internet, however, had a different perspective. Bed Bath & Beyond Inc. (BBBY) was fortunate enough to be caught up in the short squeeze meme stock mania which has continued to sensationalize the stock market and perplex more traditional investors. (See BBBY stock analysis on TipRanks)
Curtis Nagle of Bank of America published a report on the company, a day after the stock had a trading volume of nearly 100% its float and closed the day with a 62% gain. Stating that this came without any significant announcements from Bed Bath & Beyond, Nagle could no longer in good faith assign a rating or a price target.
“Investors should no longer rely upon our previous investment opinion or price objective,” declared Nagle.
Nagle wrote that the stock had completely deviated from its fundamentals, and has been trading solely on retail trader interest. BBBY has moved more or less in tandem with other high profile meme stocks, such as AMC Entertainment Holdings Inc. (AMC), GameStop Corp. (GME), and Blackberry Limited (BB).
While not as extreme in its price action, BBBY has seen massive increases in online trading and social media forum mentions, and continues to see high volumes despite a decrease in short interest.
Speaking of fundamentals, Bed Bath & Beyond has made several improvements to its core business, including renovating stores for ease of use and navigation, new products, and pickup options for large registry-related purchases. Nagle did mention that as the economy continues to reopen, BBBY has seen solid industry growth, but not enough to justify its current price activity.
On TipRanks, BBBY has an analyst rating consensus of Hold, based on 1 Buy, 8 Hold, and 2 Sell ratings. The average analyst Bed Bath & Beyond price target is $26.22, reflecting a potential 12-month downside of 17.83%.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.