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Investor Alert

June 26, 2020, 11:32 a.m. EDT

Buybuy Baby could be generating $1.2 billion in sales, making it Bath & Beyond's most valuable asset: Bank of America

Buybuy Baby, the infant-and-toddler-focused retailer that's part of the Bed Bath & Beyond Inc. (NAS:BBBY) portfolio, could be the company's most valuable name, according to Bank of America analysts. They say the chain is the best performing of Bed Bath & Beyond's assets, but "a nearly complete lack of disclosure has made it difficult for investors to value." Bank of America estimates that Buybuy Baby generates $1.2 billion in sales, has mid-single-digit growth potential for the next five years and a strong online business. "Through better sourcing, more private label and a more efficient supply chain, we believe Buybuy could experience hundreds of basis points of margin expansion," analysts led by Curtis Nagle said. Bank of America says Buybuy Baby has an implied enterprise value that's nearly equivalent to all of the company. Analysts rate Bed Bath & Beyond stock buy with a $14.50 price objective, up from $12.50. Bed Bath & Beyond shares are up 6.5% in Friday trading, and have rallied more than 106% over the past three months. The S&P 500 index (S&P:SPX) is up 15.2% for the last three months.

Link to MarketWatch's Slice.