BBBY Stock Forecast 2023: Will BBBY Recover?

BBBY Stock Forecast 2023: Will BBBY Recover?

BBBY Stock Forecast 2023: BBBY is technically bearish. The 12-month BBBY Stock Prediction is $4.8.

Latest Stock Price

2023 is proving to be a better year than 2022 for the stock market as all the indices are in green for the year till date period. While Nasdaq 100 index is up by about 5% (as of 12.01.2022), some stocks are even outperforming indices by a distance. Bed Bath & Beyond Inc (Nasdaq: BBBY) is up by a whopping 72% to date for this year.

The stock is up by 173% in the last five days. This surely indicates towards meme stock rally last seen in the year 2021 for stocks like AMC and GameStop Corporation.

But investors also know the eventuality of these meme stocks once frenzy trading cools off. We need to look at BBBY stock by zooming out of meme trading to make the right decision.

In this article, first, we look at the current situation of BBBY stock, with a rewind of 2022, and then arrive at a forecast for the stock for 2023.

BBBY Stock vs NASDAQ 100 Performance

BBBY (NASDAQ)

  • Last 1 Month: +13.3% (-4.8%)
  • Last 6 Months: -25.9% (-1.9%)
  • YTD: -73.8% (-25.5%)

BBBY Stock Forecast: Price target for the next 12 months

Average BBBY Stock Forecast for the next 12 Months$4.8
Odeon Capital Group$7.5
Wedbush$5
Morgan Stanley$2
B.Riley$5

BBBY Stock Forecast: Technical Analysis

The BBBY stock started to fall from the end of March 2022. BBBY fell from being close to $30 to below $5 by the first week of July. However, BBBY stock saw a reversal and the price went above $25 by mid-August 2022. However, after the massive sell-off, BBBY shares fell below $2 in the first week of January 2023.

The few trading days of 2023 January 2023 have been slightly encouraging for BBBY. The stock price went over $5 but on the last trading day BBBY crashed once again and now it is trading marginally above $3.5.

BBBY is trading nearly 90% below its 52-week high price which was $30.06. The 52-week low price of BBBY was $1.27.

Performance on the last Trading Day

  • Open Price: $5.24
  • Close Price: $3.66
  • Gain/Loss: -30.15%
  • Overall Market Cap: $429.3 M

Understanding the BBBY Stock Using Technical Indicators

image 298

On the above 4-hour timeframe chart, BBBY stock has turned bearish. After the latest surge, the BBBY stock crashed over 30% on the last trading day.

The latest surge took the BBBY stock net price above the 50-day MA. But with the downtrend, the BBBY stock is likely to retest the 50-day MA which is around $2.70.

BBBY stock price retreated after testing the 200-day MA. The first level of support for BBBY is $2.9 and the 200-day MA which is around $5.06 is acting as a first level of resistance.

The above chart shows, the sellers are in control. The RSI after entering the over brought territory is on a downtrend. The RSI which is currently 57.82 is likely to fall further pulling the BBBY stock price further down.

Both the MAs and the RSI are throwing a bearish momentum.

image 299

On the above chart, both the Stochastic RSI and the MACD indicator have turned bearish. The Stock RSI is within the over brought territory but it is on a downtrend with bears shorting the stock.

The MACD series proper line has reversed and is likely to fall below the 9-day MA. The trading volume for BBBY has crashed massively on the last day.

Indicators:

  • Moving Average: Sell
  • RSI: Sell
  • MACD: Sell
  • Stoch RSI: RSI

Overall: Sell

BBBY Stock Forecast 2023: The Journey in the last few years

About nine years ago, BBBY stock made an all-time high of $69 per share. At that time, retailers’ store sales and earnings per rising and it was rewarding for investors in terms of big buybacks. Now, the stock is down by almost 98% and traded for less than $2 last week. There are a couple of reasons for such a fall, but its financial performance is the main culprit to blame upon. Its annual revenue fell from $12.2 billion in 2017 to $7.9 billion in the fiscal year 2021. It is expected that the revenue will fall another 24% in fiscal 2022.

The company was in recovery mode from the second quarter of fiscal 2020 till the first quarter of fiscal 2021 when pandemic headwinds eased, but last year consumer spending was reduced significantly on discretionary goods. The company’s gross margins got hit as it tried to reduce inventory with big discounts.

BBBY
BBBY


*Source: Tradingview


It is visible in the above figure that revenue is dwindling along with gross profits, operating income, and net income. This is the reason for the 98% fall in the last one and a half years for BBBY share price.


BBBY Stock Forecast 2023: The Current Situation


On Jan 5, 2023, Bed Bath & Beyond provided a brief preview of its Q3 earning report that ended November 30, 2022. It expected a revenue drop of more than 33% as compared to the same quarter last year and a net loss to widen from $276 million to $386 million. These forecasts eventually came true.

But with this, it also said that due to recurring losses and negative cash flow from operations in the first nine months, there is doubt that it can stay in the business. The company also claimed that it is considering all strategic alternatives such as restructuring debt, selling out assets, and even filing for bankruptcy protection.

But there is a turnaround in stock fortunes since the announcement of bankruptcy. Retail traders have been steady buyers of the stock since Jan 5, 2023. The share price has risen 300% from January 6th to January 12th, 2023. While the share volume has also increased multifold from 20 million past month to 390 million on January 12th.

It was among the most traded stocks on Fidelity’s retail platform with buy orders outpacing sell orders. Short interest in the stock has been rising and stands at 52% of floating shares, up from 47% a month ago.


BBBY Stock Forecast: Bull and Bear Case for 2023


Bear Case

Bed Bath & Beyond has not generated a full-year profit since 2017. Apart from falling net income and revenue, it is the dire situation in cash and cash equivalents that is worrisome. Total cash and cash equivalents stand at $135 million only as of the second quarter of 2022, but still, have $5.2 billion of the total liability.

It is required to pay $1.5 billion of interest on its debt on February 1 but is likely to skip that payment to conserve cash. 30 days grace period starts if it skips the payment.

Like AMC Entertainments, management tried to settle some of its debt by exchanging its shares, but the proposal has been broadly rejected. The first tranche of the $300 million debt is maturing in August 2024 and it is highly unlikely that the company will be able to repay it.

Analysts have stopped coverage of the stock claiming it to be less institutionally relevant. There is no buy recommendation for the stock and analysts expect Bed Bath & Beyond shares are only worth a dime.

Bull Case

The only possibility for the stock to move higher in due course of time in 2023 is the massive participation from retail traders. As seen in the last week, retail traders and ardent followers of the Reddit platform are trying to lift BBBY stock via short squeeze and frenzy trading.

A similar trend was seen with the stock exactly two years back in January 2020 when the share price moved from $17.76 on 31st December 2020 to $35.33 on January 29th, 2021. There was a turnaround in the financial performance also in the following quarters and the company and stock survived for the next two years.

This time also, BBBY has started 2023 as a meme stock and has formed a low of less than $2, but it is surviving with the support of retail investors. We can just hope the company can take it forward with a turnaround in the financial performance in the upcoming quarters.

A similar incident happened in the late summer of 1997 when Apple had negative cash flow and falling revenue and Microsoft came to the rescue with a $150 million investment and a five-year technology alliance. Today, Apple is the most valuable stock even leaving behind Microsoft. 

BBBY Stock Forecast Today

Overall OutlookNeutral
1. Market's WisdomN/A
1a. Market DataN/A
1b. Technical RecommendationNeutral
2. Crowd's WisdomPartially Positive
2a. Social Media BuzzHigher
2b. Social Media SentimentNeutral

Conclusion

All said and done, it is not recommended to buy BBBY stock in 2023 even if it is trading at just 0.03 times this year’s sales. Yes, there is a minute possibility of a dramatic turnaround in 2023, but it is very hard to run big box retail stores at profit in the rising era of e-commerce retailers.

MULN Stock Forecast: $MULN Underperforms NASDAQ even as EV Stocks Rise

BBB Stock Forecast: The latest addition to the list is Bed Bath & Beyond stock (Nasdaq: BBBY) whose share price has become too volatile to handle as institutional investors and meme traders lock the horns against each other.

Vineet Agarwal

Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Stocks or Crypto Coins. Please consult a registered investment advisor to guide you on your financial decisions.

Subhash

Subhash

Subhash, Founder of Crowdwisdom360 is an MBA and a Trained Financial Advisor with an extensive background in Forecasting in Financial Services and Politics. He has appeared many times on National TV and has written for a variety of magazines on Wealth Management and Election Strategy.

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