Analyst Defends Bed Bath & Beyond After Warning
Bed Bath & Beyond
announced late Tuesday that it is lowering its outlook for its fiscal third quarter.
The company said it now expects EPS in a range of 31 to 35 cents for the quarter ending Nov. 29. That's down from previous guidance of 41 cents to 47 cents a share the company gave in September. Same-store sales for the quarter declined about 5.6%, which was steeper than the company's guidance of relatively flat to low single-digit decline.
A Friedman Billings Ramsey analyst upgraded shares of the home decor company Wednesday, saying the company's low stock price coupled with the bankruptcy of one of its competitors makes it a more reasonable choice for investors.
The $19 price area seems to be where there is some technical support for BBBY shares. If that fails to hold, then the next area of support comes in the $13 range. We would not jump into shares based on the upgrade this morning. A low price does not mean the stock price can not go even lower. The bankruptcy of Linens & Things has been in the market for quite a while, so that catalyst is not new. We would rather wait for shares to stabilize before making any significant long-term bets.
Bed Bath & Beyond does not currently pay a dividend.
Research In Motion Shares Bounce, Despite Warning
Research In Motion
announced it is trimming its earnings and revenue guidance for the fiscal third quarter.
The company is blaming unfavorable foreign-exchange rates and a weak economy for the miss. The company sees EPS in a range of 81 cents to 83 cents a share, below a prior forecast of 89 cents to 97 cents. Revenue estimates are being lowered to a range of $2.75 billion to $2.78 billion, lower than its previous estimate of $2.95 billion to $3.1 billion.
The warning should not be a surprise to investors as the stock is down from June highs of $145 a share to the recent mid-$30 price range. Wall Street has certainly been expecting the bad news, so a bounce in the shares may be likely. We would look to
as a better tech tell for investors looking for tech exposure in their portfolio.
Research In Motion does not currently pay a dividend.
EDF Tries Last-Minute Bid for Part of Constellation Energy
Electricite de France
, Constellation's biggest shareholder, offered $4.5 billion for just half of Constellation Energy's nuclear business Wednesday.
EDF, which owns 9.5% of
, said the offer values the company at around $52 per share and that the price represents a 96% premium to the rival offer for all of Constellation. Buffett's MidAmerican Energy Holdings offer values the company at around $26.50 per share.
The whole Constellation deal seems to get more bizarre as time rolls on. EDF withdrew its own bid of $35 per share in October for all of Constellation. Now the company is trying to come back and make a last minute play for the nuclear assets. The market's early reaction seems muted, so the chance for a deal may seem unlikely. We would avoid the shares at this point, and look elsewhere for better opportunities.
Constellation Energy is not recommended at this time, holding a Dividend.com Rating of 2.7 out of 5 stars.
Freeport-McMoRan Stuns Wall Street By Suspending Dividend
announced on Wednesday that it is suspending its dividend and cutting production as well.
Management said the suspension of its dividend reflects the sharp and rapid decline in copper and molybdenum prices, the dislocation of capital markets and the uncertain economic outlook.
We had removed shares of Freeport from our "Recommended" list on Sept. 2, when the shares traded at $89.32. The company had a nearly 9% dividend yield at the time of this morning's announcement. We are certainly cognizant of dividend cuts affecting names, but Freeport's plan to completely suspend the dividend is hitting the shares hard at the start of trading today. We will no longer be rating the stock of Freeport-McMoRan.
Be sure to visit our complete
recommended list of the Best Dividend Stocks
as well as a
detailed explanation of our ratings system
At the time of publication, the author had no positions in stocks mentioned, although positions may change at any time.
Tom Reese and Paul Rubillo are senior editors of Dividend.com. Visit Dividend.com for more dividend stock ratings, picks, news, and analysis for long-term and income-seeking investors.