Bed Bath & Beyond (BBBY) - Get Report shares were climbing nearly 6% to $10.46 Monday after an analyst at Wedbush upgraded the home goods retailer to outperform from neutral and raised his stock price target to $16 from $14.

Analyst Seth Basham wrote in a note to investors that while turning around declining retailers is difficult, particularly in the midst of unfavorable secular trends and soft industry sales growth, the Union, New Jersey-based company has a "good chance of stabilization" in earnings over the next two years as its changes take hold.

The company has a reconstituted board with "much-improved" governance, is resetting its cost structure, has a plan to reduce inventory by 35%, is rapidly refreshing stores to improve the shopping experience, has launched two private label brands, and is evaluating opportunities to leverage its store lease expiration cadence and sell noncore assets, Basham wrote, adding that he believes buy-side expectations are "very low."

Bed Bath & Beyond is scheduled to report second-quarter earnings this week. Analysts are expecting the company to report earnings of 29 cents a share on revenue of $2.77 billion, down 5.7% from a year ago.

Earlier this month, Bed Bath & Beyond said it planned to close underperforming stores and reduce $1 billion of store inventory. The company has been under heavy pressure this year from activist investors to improve performance. In May, Mary Winston was named interim CEO, replacing Steven Temares.

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