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Brokerages typically have a strict separation between equity
analysts covering companies and investment bankers working for
them. There is no suggestion that Jefferies' research note on
Bed Bath and the bank's hiring by the company were related.
In a note published on Wednesday, Jefferies analyst Jonathan
Matuszewski raised his price target on Bed Bath to $9 from $5,
citing confidence in the company's cost cutting measures that
include job cuts and store closings.
That is the highest price target on Bed Bath's stock among the
16 analysts who cover it that are tracked by Refinitiv, with the
median price target currently listed as $3.
On Thursday, Raymond James, another brokerage, downgraded Bed
Bath to "underperform" from "market perform."
"We find it challenging to even maintain our neutral rating
given the current trends of the business and ongoing cash burn,"
Raymond James analyst Bobby Griffin wrote in a note.
Bed Bath also disclosed on Wednesday it had hired Jefferies to
sell 12 million shares in the open market. Jefferies is entitled
to a commission of up to 3% of the amount sold, according to a
regulatory filing.
Jefferies and Bed Bath representatives did not respond to
requests for comment. Bed Bath shares ended trading down 8.6% at
$8.71 on Thursday.
Investors view Bed Bath as one of the so-called "meme" stocks,
shares that trade primarily based on social media hype rather
than their economic fundamentals. This is not the first time
Jefferies analysts have taken a bullish view on a meme stock
that is out of sync with the rest of Wall Street.
In March 2021, Jefferies analysts raised their price target on
video game retailer GameStop Corp's stock to $175 from $15,
citing the company's pivot to online sales. The price target was
far higher than the $25 median among seven analysts covering the
company at time, according to Refinitiv. As with Bed Bath,
Jefferies was handling GameStop's stock sale program at the
time.
Since then, GameStop shares have never traded more than $87.
They ended trading on Thursday at $27.63. The last price target
change from Jefferies on GameStop was in June, from $90 to $110,
Refinitiv data shows.
(Reporting by Noel Randewich in San Francisco and Svea
Herbst-Bayliss in Rhode Island; Editing by Greg Roumeliotis and
Chris Reese)
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