J.P. Morgan decreased its price target on the company on Thursday to $65 from $75 after the company reported earnings of 93 cents per diluted share on revenue of $2.66 billion, both below analysts' expectations of 94 cents per diluted share on $2.7 billion in revenue.
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Separately, TheStreet Ratings team rates BED BATH & BEYOND INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate BED BATH & BEYOND INC (BBBY) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity, attractive valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Specialty Retail industry and the overall market, BED BATH & BEYOND INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- Net operating cash flow has increased to $781.25 million or 33.41% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -3.54%.
- BED BATH & BEYOND INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BED BATH & BEYOND INC increased its bottom line by earning $4.81 versus $4.58 in the prior year. This year, the market expects an improvement in earnings ($5.05 versus $4.81).
- BBBY's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.47 is very weak and demonstrates a lack of ability to pay short-term obligations.
- You can view the full analysis from the report here: BBBY Ratings Report
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.