Bed Bath & Beyond Stock Bounces on Guidance

However, BBBY is running into a historically bearish moving average

Deputy Editor
Jan 10, 2019 at 10:04 AM
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The shares of Bed Bath & Beyond Inc. (NASDAQ:BBBY) are up 4.2% at $12.78 in early trading, after the company announced a fiscal third-quarter earnings beat and stronger-than-expected full-year forecast. The company cited its heavily revamped stores and digital platform, as well as the success of its loyalty programs. However, several analysts remain wary, with Wedbush, Credit Suisse, and Jefferies cutting their price targets on BBBY shares. UBS, however, lifted its price target to $13 from $12.

BBBY stock has been in a channel of lower highs and lows since its early 2015 peak. More recently, the stock gapped lower in October after an earnings miss, and touched a 20-year low of $10.46 on Dec. 24. Now, the equity is running up against its 70-day moving average -- a trendline with historically bearish implications.

Unsurprisingly, most analysts following Bed Bath & Beyond have been wary about a comeback, with eight doling out a tepid "hold" rating, one calling it a "sell," and five giving it a "strong sell." In fact, not one brokerage firm deems BBBY worthy of a "buy" or better rating. Plus, the consensus 12-month price target of $13.20 is right in line with current levels.

Echoing that, bears have been swarming the stock of late, with short interest up almost 10% in the past two reporting periods, now accounting for a quarter of the stock's available float. At BBBY's average trading volume, it would take over six sessions for traders to cover their bearish bets, should today's earnings momentum continue.

 

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