Why Bed Bath and Beyond (BBBY) Stock Is Climbing This Morning

NEW YORK (TheStreet) -- Shares of Bed Bath & Beyond Inc. (BBBY) are jumping 1.56% to $60.13 after it announced the pricing of three series of senior unsecured notes for an aggregate principal amount of $1.5 billion.

The home retailer also announced it intends to enter into an accelerated share repurchase agreement to buyback an aggregate of $1.1 billion of its common stock following the closing of the notes offering.

Bed Bath said it's been in discussions with lenders to enter into a $250 million senior unsecured revolving credit facility, expiring in 2019.

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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 a few notable strengths, 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 revenue growth, notable return on equity, reasonable valuation levels 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:

  • BBBY's revenue growth has slightly outpaced the industry average of 0.9%. Since the same quarter one year prior, revenues slightly increased by 1.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • 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.
  • BED BATH & BEYOND INC reported flat earnings per share in the most recent 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 ($4.96 versus $4.81).
  • 38.80% is the gross profit margin for BED BATH & BEYOND INC which we consider to be strong. Regardless of BBBY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 7.04% trails the industry average.
  • You can view the full analysis from the report here: BBBY Ratings Report
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