Loop Capital Markets analyst Anthony Chukumba reiterated a Sell rating and a $5.00 per share price target on Bed Bath & Beyond (NASDAQ:) stock.
The analyst has urged investors to “begin to seriously consider ‘endgame’ scenarios” amid deteriorating financial performance at the company. Moreover, the worsening US macroeconomic conditions are also acting as an additional headwind in the near term.
“We think it will be very difficult for BBBY to regain the market share and relevance the company has lost over the past several years—and management has run out of ‘levers to pull’ at this point,” Chukumba noted in a client note.
“We are increasingly beginning to think the most likely scenario is a Chapter 11 bankruptcy filing, with buybuy BABY sold and the sale proceeds being utilized to repay bondholders,” Chukumba added.
On Ryan Cohen’s involvement, the analyst noted that it is “highly unlikely” that the billionaire will prove to be BBBY’s “savior”, especially bearing in mind GameStop’s fundamental performance under his watch.
“We also note GameStop (NYSE:) stock has declined over 80% from its short squeeze induced high—and more importantly, has shown no tangible signs of fundamental improvement under Mr. Cohen’s leadership, with losses actually accelerating. Finally, we note Mr. Cohen does not have quite as much ‘skin in the game’ as some investors perceive given the fact ~18% of his stake is in the form of January 2023 call options with exercise prices of $60-$80,” the analyst concluded.
BBBY stock is down nearly 3% today.
By Senad Karaahmetovic