Shares of Bed Bath & Beyond (NASDAQ:BBBY) are surging again today after taking a breather in Friday’s trading session. There is no fundamental reason to justify its recent rally as whispers of bankruptcy continue to circulate. Instead, the rally is likely the result of a short squeeze, with other meme stocks seeing similar rallies.
Analyst Christopher Horvers from J.P. Morgan (NYSE:MS), who has a Hold rating on the stock, doesn’t believe that BBBY is trading based on valuation but rather on potential liquidations. In addition, he doesn’t believe that it’s easy for retailers to go bankrupt unless vendors start offering less favorable terms while credit providers stop providing funds. However, he did note that Bed Bath & Beyond has seen mixed results in attempting to improve these relationships with vendors and creditors.
Overall, Wall Street analysts have a consensus price target of $1.36 on BBBY stock, implying almost 67% downside potential, as indicated by the graphic above.
