Sunday, August 18, 2013

BBBY Hits New 52-Week High - Analyst Blog

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Shares of Bed Bath & Beyond Inc. (BBBY) touched a new 52-week high of $76.94 on Friday, Jul 12, 2013 and eventually closed trade at $76.74. The stock has been performing well based on the company's robust quarterly results, impressive outlook and store growth initiatives. This specialty retailer has amassed a year-to-date return of 36.7%.

Average volume of shares traded over the last 3 months was approximately 2,061K. Moreover, the company currently trades at a forward P/E of 15.3x, an 8.8% discount to the peer group average of 16.77x. The last traded price is 0.6% above the Zacks Consensus average analyst price target of $76.29. Additionally, the company's long-term estimated EPS growth rate is 13.6%.

Investors are optimistic about this Zacks Rank #3 (Hold) stock as it constantly strives to expand and renovate its stores, boosting online presence, incorporating technological advancements and reviving its merchandise mix to enhance productivity. Such measures bode well for future sales.

Currently, it enjoys a strong countrywide network of more than 1,100 stores and is focused on offering merchandise to suit consumer preferences. In the long run, the company envisions opportunities to operate over 1,300 Bed Bath & Beyond stores across the U.S. and Canada, while it plans to expand other concepts from coast to coast.

Bed Bath & Beyond's efforts are paying off well, as evident from its first-quarter fiscal 2013 earnings that rose 4.5% to 93 cents per share, benefiting from the performances of World Market (Cost Plus Inc.) and Linen Holdings. Moreover, the company's earnings were in line with the Zacks Consensus Estimate.

This company also witnessed sales growth of 17.8% year over year, driven by the aforesaid acquisitions as well as increase in comparable store sales and new store openings.

Ma! nagement projects fiscal 2013 earnings per share in the range of $4.84–$5.01, while second-quarter fiscal 2013 earnings per share are estimated to range from $1.11–$1.16. Net sales are expected to rise 7% to 9% in the second quarter and 5% to 7% for fiscal 2013.

Bed Bath & Beyond's focus on developing its diversified product portfolio will position the company more advantageously than its peers. Given the strength of many of its brands and the opportunities in distribution, we believe that it is well poised for long-term growth.

Apart from Bed Bath & Beyond, other retail stocks such as The Gap, Inc. (GPS), Big 5 Sporting Goods Corp. (BGFV) and Conns Inc. (CONN) achieved new 52-week highs of $45.37, $24.00 and $58.40, respectively, on Jul 12, 2013.

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