NEW YORK (TheStreet) -- Bed Bath & Beyond (BBBY) - Get Report stock is falling 2.29% to $43.05 in early morning trading on Wednesday after the company was downgraded to "underweight" from "sector weight" at KeyBanc Capital Markets.

The home furnishings retailer is facing more competition in its segment, as well as from online retailers.

"[W]e believe BBBY is in a difficult spot competitively, with significant direct product overlap with Amazon (AMZN) and generally higher online prices (net of shipping)," KeyBanc said in an analyst note this morning.

Bed Bath & Beyond, as well as Pier 1 Imports (PIR) and Haverty Furniture Cos. (HVT), are too dependent on same store sales for growth and have been losing market share to stronger e-commerce companies.

"[E]-commerce competitors are gaining market share while putting pressure on margins and expenses," analysts added.

Restoration Hardware Holdings (RH), Tempur Sealy International (TPX) and Mattress Firm Holding Corp. (MFRM) are in a better position to gain market share, while improve margins over time, analyst noted.

TST Recommends

Separately, Bed Bath & Beyond has a "hold" rating and letter grade of C at TheStreet Ratings because of the retailer's revenue growth, attractive valuation levels, good cash flow, deteriorating net income, disappointing stock performance and feeble earnings per share growth.

You can view the full analysis from the report here: BBBY

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. 

Image placeholder title

BBBY

data by

YCharts