Target is poised to benefit from Bed Bath & Beyond’s demise, Oppenheimer says
Bed Bath & Beyond’s potential bankruptcy could bode well for Target as the retailer picks up the sales from more store closures, Oppenheimer said. “We think TGT could have even better access to more brands over time to the extent a significant BBBY retrenchment comes to fruition,” Oppenheimer analysts said in a note. Bed Bath & Beyond said Thursday it doesn’t have enough cash to pay down its debts and it has defaulted on its credit line with JPMorgan. In a securities filing , the struggling home goods retailer warned that “this will lead the Company to consider all strategic alternatives, including restructuring its debt under the U.S. Bankruptcy Code.” BBBY 5D mountain Bed Bath & Beyond Bed Bath & Beyond’s stock plunged 22% following the news Thursday. Oppenheimer said a full liquidation of Bed Bath & beyond could conservatively add in the shorter-term 50–100 basis points to Target comps and between 14 cents and 28 cents per share to earnings. Earlier this week, Oppenheimer initiated coverage of Target with an outperform rating, betting the retailer will gain share over time from its challenged peers. Wall Street analysts have been assessing which competitors would get the biggest boost. UBS and Telsey Advisory Group both believe Walmart and Target stand to gain the most market share from Bed Bath & Beyond as they both have significant overlap with their product offerings and geography.