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Bed Bath & Beyond Price Target From Wedbush Raised to $19 But Stock Down 12% Pre-Bell

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Bed Bath & Beyond (BBBY) received a boost to its price target Thursday from Wedbush, yet its shares fell 12% in pre-market trading after the domestic-merchandise and home-furnishings company released a mixed fiscal Q4 report late Wednesday.

The new price target from Wedbush is $19 per share, up from $14. The new target is slightly below the stock’s Wednesday closing price of $19.41, but above its recent Thursday pre-market trading level as the stock tumbled 12% pre-market to $17.06.

In a note to clients, Wedbush highlighted that Bed Bath & Beyond’s Q4 adjusted operating results were “slightly better than expectations” while noting its guidance for 2019 was updated “to embed sharper sales declines but better margins, tax rate, share repurchases and” earnings per share.

The firm sees the company as “taking steps in the right direction, favoring profitability over near-term sales growth.”

However, it added: “While a better 2019 profit outlook leads us to increase our EPS estimates and boost our target price to $19 from $14, with a murky medium-term fundamental outlook and no clear path to more material activist-driven change, we remain neutral on BBBY.”

After Wednesday’s market close, Bed Bath & Beyond reported its fiscal Q4 ended March 2 had adjusted earnings per share of $1.20, surpassing analysts’ mean estimate according to Capital IQ of $1.10. However, its revenue came in at $3.31 billion, missing analysts’ mean estimate of $3.33 billion.

For the new fiscal year, the company forecast adjusted EPS of $2.11 and $2.20, above analysts’ mean estimate at the time of $1.81. However, it sees Q1 adjusted EPS in a range of $0.07 to $0.12, well below the Street view of $0.32.

The company also said its board increased its quarterly dividend to $0.17 per share from $0.16 per share.

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