NewsBreak: Bed Bath & Beyond Jumps as Analyst Predicts Turnaround

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© Reuters. © Reuters. – Shares of home goods retailer Bed Bath & Beyond (NASDAQ:) jumped more than 6% Monday after a Bank of America/Merrill Lynch analyst said the company’s new CEO has the tools to lead a successful turnaround.

  • Mark Tritton had been chief merchandising officer at Target (NYSE:) before taking the Bed Bath & Beyond job in October. Analyst Curtis Nagle said he believes Tritton, who helped Target on its own turnaround, is the right man to lead Bed Bath & Beyond to a recovery.
  • The task will be daunting, Nagle wrote in a note. It will include selling non-core or unprofitable businesses, cost-cutting and store rationalization, selling unneeded real estate and, lastly, improving merchandising, sourcing, and in-store and online operations.
  • If the turnaround works, Bed Bath & Beyond could be generating EBITDA of more than $900 million annually by 2021, Nagle said. That would let the company buy back up to $1 billion in shares – about 60% of its current market capitalization.
  • Shares reached as high as $13.46 before settling back to $13.45, up 7.4 %. The shares are up 84% since hitting a 52-week low of $7.31 on August 15. For the year, they’re up nearly 19%.
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