UPDATE: Nomura Upgrades Bed Bath & Beyond to Buy, Raises PT on Good Upside

In a report published Wednesday, Nomura analyst Aram Rubinson upgraded the rating on Bed Bath & Beyond BBBY from Neutral to Buy, and raised the price target from $72.00 to $82.00. In the report, Nomura noted, “While we have long admired the company as one of the retail industry's best merchants, BBBY has not been as inspiring in recent years. Since moving to Neutral over a year ago we have cited a number of risks,including: merchandising, Keurig, ecommerce, margins and comps. We believe BBBY shares are attractively valued at only 11.4x our 2014 EPS. Excluding cash, that P/E falls to only 10.5x. This compares with 13.3x for the market and 15.2x for comparable names. Shares also offer a free cash flow yield of 8.9% using our '14 estimates. We derive an $82 price target by applying a 6.5x multiple to our 2015E EBITDA. Key risks to that target include a market that is less enamored with housing-related stocks. Ecommerce also poses risks. Even still, we believe the upside outweighs the downside.” Bed Bath & Beyond closed on Tuesday at $66.98.