Bed Bath & Beyond Bankruptcy 'Beneficiaries' Gain Analyst Support As Holiday Season Nears

Bed Bath & Beyond BBBY has a turnaround strategy in the works, but the home furnishings retailer is still expected to go bankrupt.

Other retailers are likely to benefit from this scenario, especially as the holiday gift-giving season approaches.

Walmart Inc. WMT and Target Corporation TGT are both in a strong position to gain market share from competitors, according to an analyst note.

See Also: Could Target And Walmart Benefit From A Bed Bath & Beyond Bankruptcy?

The Analyst: KeyBanc Capital Markets analyst Bradley Thomas initiated coverage of Walmart and Target with Overweight ratings and price targets of $155 and $200, respectively.

The Thesis: Although the margins of Walmart and Target were below historical levels in the first half of the year, both retailers are poised for margin expansion in 2023 and beyond, Thomas said.

The companies witnessed margin pressure due to inventory clearance activity but their performance so far in the third quarter “seems encouraging,” he added.

“E-commerce, grocery sales, and store delivery/pickup grew significantly during the pandemic and we believe have solidified WMT and TGT for share gains and continued growth in digital commerce, with a material opportunity for advertising as well,” the analyst further wrote.

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WMT, TGT Price Action: Shares of Walmart had risen by 0.44% to $135.82, while Target’s stock had lost 0.23% to reach $165.85 at the time of writing. Bed Bath & Beyond, meanwhile, was down 0.72% to $8.31.

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