Prudential upgraded Bed Bath & Beyond (BBBY) to overweight from neutral, citing the company's strong fundamentals and attractive relative valuation.
Analyst Mark Rowen says fourth quarter results beat both his top- and bottom-line estimates. He notes that total sales rose 15% year over year, driven by comparable sales growth of 6.3%. Meanwhile, earnings per share (EPS) of 67 cents came in 3 cents above his estimates, for which he attributes 2 cents to stronger-than-expected comparables and a penny to lower share count. Additionally, he notes that Bed Bath & Beyond raised its fiscal year 2007 (ending Feb) EPS guidance to $2.17, surpassing his former $2.11 estimate. Accordingly, he raises his fiscal year 2007 EPS estimate to $2.19. He also set a $46 stock price target.