Deutsche Bank Reiterates Hold Rating on BBBY

Deutsche Bank is out with a research report this morning, where it reiterates its Hold rating on Bed Bath & Beyond BBBY ahead of earnings; it has a $51.00 price target on the stock. The DB analysts believe that the company's upcoming quarter will be solid. They believe that comps will come in at 6% and that EPS will be $0.61. Guidance for is for mid single digit comps and EPS in the range of $0.59 to $0.63. As for margins, they are modeling margins up 85 basis points this quarter, which is less the 300 basis point average gain over the past five quarters as BBBY started to cycle improvements. As for valuation, the analyst remarked, “BBBY is trading at 15.3x and 13.5x our 2010 and 2011 EPS estimates compared to the hardline averages of 15.3x and 13.2x. Our $51 price target is based on 17x. This is a premium to the hardline average as we believe there is potential upside to earnings estimates.”