Bed Bath and Beyond BBBY Stock Forecast 2023

BBBY Stock Forecast 2023: Latest Stock Price

BBBY Stock Performance

• Last 1 Month: 127.2%
• Last 3 Months: -82.3%
• Last 12 Months: -96.9%

BBBY Stock Forecast: Price target for the next 12 months

Average BBBY Price Target for the next 12 Months	$1.35
Wedbush	$0.25
Baird	$1
UBS	$1.5
Wells Fargo	$2
Telsey Advisory Group	$2

Bed Bath and Beyond Latest

The bankruptcy of Bed Bath & Beyond could benefit TJX, owner of TJ Maxx.

The bankruptcy of Bed Bath & Beyond could help TJX’s HomeGoods brand, according to TJX corporate leaders. HomeGoods, the second-largest division of TJX, is in a good position to capture market share as Bed Bath & Beyond closes its locations. A large percentage of Bed Bath & Beyond sites are near a HomeGoods or TJ Maxx store, giving HomeGoods a chance to draw in former Bed Bath & Beyond customers. HomeGoods can alter its product lineup to match well-liked items that Bed Bath & Beyond once sold. Although the inventory discounts by Bed Bath & Beyond would be difficult at first, TJX is anticipated to gain over time.

Investors Still Have Hope for Bed Bath & Beyond

Despite the bankruptcy of Bed Bath & Beyond and the closing of its stores, some individual investors are betting on a possible stock recovery. These investors, who are frequently drawn to meme stocks, are nonetheless upbeat about the future of the business despite its terrible fundamentals. The stock of Bed Bath & Beyond is currently only worth pennies on the over-the-counter market, and as traders speculate on a potential turnaround, it has attracted attention on social media sites. Despite the company’s catastrophic financial state, some investors are optimistic that a bid for its assets or the participation of billionaire investor Ryan Cohen, who was successful with GameStop, will result in a favourable outcome.

BBBY Stock Technical Analysis

The long-term technical analysis of the stock suggests a slightly bullish outlook, indicating positive potential for the future. Furthermore, the short-term period graph presents a compelling opportunity to purchase the stock. Even when observed over a one-day period, the graph continues to indicate a favorable buying area. This suggests that the stock may be primed for an upward movement in the near term.

Examining the moving averages (MA), we can see that MA 50 stands at 0.36 and MA 200 at 3.76. Both moving averages show a neutral trend, showing the neutral sentiment surrounding the stock.

The momentum oscillators, such as the relative strength index (RSI) and the ultimate oscillator, also favor the stock. With an RSI of 55.524 and an ultimate oscillator reading of 66.060, these indicators suggest that the stock has positive momentum.

Moreover, the MACD (12, 26) and Williams%R indicators both present an opportunity for purchasing the stock and are advantageous for identifying trends. These indicators further reinforce the potential for an upward movement in the stock’s price.

In addition, the high volatility index indicates that the positive oscillations may be sustained by a large enough volume of trading activity. This suggests that the stock has the potential to experience significant price fluctuations, which could be advantageous for investors.

Taking all these factors into consideration, the stock appears to be in a favorable position for potential growth.

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.

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.

Will BBBY Stock Price Become $0?

Bed Bath Beyond is trying to avoid bankruptcy by raising around $1 billion from a preferred stock sale a few months back. BBBY said that it has been able to win commitments from investors to raise more than $1 billion in the capital in its bid to avoid bankruptcy. Additionally, the company is also drawing $100 million from a credit line to repay outstanding debt. However, analysts are not convinced about these moves will be able to save Bed Bath Beyond.

Bed Bath & Beyond is likely to file for bankruptcy and with that move equity holders will almost surely be wiped out.

Wedbush analysts led by Seth Basham have cut their 12-month price target for Bed Bath & Beyond stock. Previously they predicted the stock price to reach $1 in 12 months but now the analysts predict BBBY to be valued at $0. According to this, raising $1 billion in the capital is a “last gasp” at survival for BBBY. Even if the company avoids bankruptcy, the “highly dilutive” offering unveiled this week would wipe away the value of Bed Bath & Beyond’s common stock.

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. 

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.

Pratyush Mengi

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.