Bed Bath & Beyond (BBBY) - Get Bed Bath & Beyond Inc. Report shares jumped higher Thursday as the home retailer extended its move beyond the meme stock label following an notable upgrade from Bank of America.
BofA analyst Curtis Nagle tagged a 'buy' rating on Bed Bath & Beyond shares, while holding his $38 price target in check, as he argued that "meme investing" momentum, as well as short interest, has likely subsided. He also sees Bed Bath & Beyond on track for its target of between $850 million and $1 billion in earnings by 2023.
That said, short interest in the shares remains elevated, with recent data from S3 Partners showing just over $918 million in bets against the group, a figure that represents around 31.1 million shares, or30% of the outstanding float.
Bed Bath & Beyond shares were marked 2% higher in early trading Thursday to change hands at $29.95 each, a move that would extend the stock's year-to-date gain to around 72%.
Bed Bath & Beyond is forecasting net sales in the region of $8 billion to $8.2 billion and adjusted earnings of between $500 million and $525 million as part of its aggressive turnaround strategy under CEO Mark Tritton.
The group said it sees free cash flows of between $500 million and $1 billion over the next three years, and low to mid single digit growth in comparable sales for its 2023 financial year. Sales for 2023 are expected to rise to around $1.5 billion, the company said late last year.
"We will build on these strong foundations with a three-year growth strategy that further elevates the shopping experience, modernizes our operations, and unlocks sales growth, margin expansion, increased cash flow and strong and sustainable total shareholder return," Tritton said.