Bed Bath & Beyond, Inc. (NYSE:BBBY) Analysts Are Pretty Bullish On The Stock After Recent Results

Bed Bath & Beyond, Inc. (NYSE:BBBY) shareholders are probably feeling a little disappointed, since its shares fell 9.0% to US$7.65 in the week after its latest third-quarter results. It looks like the results were pretty good overall. While revenues of US$257m were in line with analyst predictions, statutory losses were much smaller than expected, with Bed Bath & Beyond losing US$0.07 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

Taking into account the latest results, the consensus forecast from Bed Bath & Beyond's six analysts is for revenues of US$1.10b in 2026. This reflects a satisfactory 2.7% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 64% to US$0.76. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.16b and losses of US$1.12 per share in 2026. While the revenue estimates fell, sentiment seems to have improved, with the analysts making a considerable decrease in losses per share in particular.

View our latest analysis for Bed Bath & Beyond

The consensus price target rose 5.5% to US$11.50, with the analysts increasingly optimistic about shrinking losses, despite the expected decline in revenue. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Bed Bath & Beyond, with the most bullish analyst valuing it at US$17.00 and the most bearish at US$8.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that Bed Bath & Beyond is forecast to grow faster in the future than it has in the past, with revenues expected to display 2.2% annualised growth until the end of 2026. If achieved, this would be a much better result than the 18% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.1% annually for the foreseeable future. So although Bed Bath & Beyond's revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Bed Bath & Beyond going out to 2027, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for Bed Bath & Beyond (1 is significant!) that you need to be mindful of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.