By Tomi Kilgore
Shares of Bed Bath & Beyond Inc. blasted off Tuesday, again, as the retail crowd defied, with renewed vigor, another Wall Street analyst’s warning that investors sell because of “unrealistic” valuations.
The stock /zigman2/quotes/209801102/composite BBBY +0.16% was down as much as 4% about a minute after the open, before doing an abrupt about-face. The meme stock shot up as much as 78.8% to an intraday high of $28.60 just before midday, then pulled back to close up 29.1% in very active trading. It has more than doubled (up 110.9%) amid a five-day win streak, and has skyrocketed 349% over a 14-day stretch in which it rose in 13 of the days .
Trading volume exploded, to reach a record for the stock of 395.3 million shares. The previous volume record of 164.7 million shares, set the day before, was broken before noon Eastern. The stock was halted three times for volatility during the session.
B. Riley analyst Susan Anderson cut her rating to sell from neutral while affirming her $5 stock price target, which implies about 76% downside from current levels.
She said the downgrade comes after the stock (BBBY) has skyrocketed even after the home goods retailer reported “very weak” fiscal first-quarter results that led to the ouster of its chief executive officer.
“BBBY has recently gained the attention of retail traders in the Wall Street Bets Reddit forum again , which gained notoriety during the GameStop saga back in January 2021,” Anderson wrote in a note to clients. “We believe BBBY is currently trading at unrealistic valuations.”
On a bright side, she said the rally could provide the company with a “long-term lifeline,” as prior meme-stocks, such as GameStop Corp. /zigman2/quotes/203755179/composite GME +6.74% and AMC Entertainment Holdings Inc. /zigman2/quotes/200235402/composite AMC +9.08% , have used the Wall Street Bets boost to raise cash through at-the-money stock sales .
Anderson is the second analyst to turn bearish on Bed Bath & Beyond in the past week. Of the 19 analysts surveyed by FactSet, 11 now have the equivalent of sell ratings on the stock. Only one analyst is bullish and the other seven are neutral. The average stock price target is $3.49, implying 83% downside from current levels.
Short interest, or the number of bearish bets on the stock, represented 47.2% of the public float , or shares available for the public to trade, according to the latest exchange data. That compares with 23.5% for GameStop and 18.4% for AMC .
Bed Bath & Beyond shares have advanced 41.6% year to date but have lost 22.2% over the past 12 months. In comparison, the SPDR S&P Retail exchange-traded fund /zigman2/quotes/206947004/composite XRT +1.10% has dropped 20.0% over the past year and the S&P 500 index /zigman2/quotes/210599714/realtime SPX -0.21% has slipped 3.2%.