Bed Bath & Beyond plummets 23% after earnings miss, but BofA sticks to 'buy' and expects 106% upside (BBBY)

The company saw revenue get cut in half, and announced it would be closing 200 stores over the next two years.
Despite the retailer's weak earnings, Bank of America reiterated its "buy" rating on Thursday and increased its price target to $16.50, representing implied upside of 106% from current levels.
In an interview with CNBC on Thursday, Bed Bath & Beyond's CEO Mark Tritton was hopeful, saying "We're seeing some great numbers in June and beyond, so we're excited about what we have ahead for us."
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Bed Bath & Beyond plunged as much as 23% Thursday after the company reported dismal first quarter earnings that showed the extent of the damage COVID-19 had on its business.

Here are the key numbers:

Revenue: $1.31 billion, down 49% year-over-year Adjusted EPS: -$1.96, versus the -$1.32 estimate Gross Margin: 26.7%, down 780 basis points

The retailer also announced it plans to close approximately 200 stores over the next two years as it looks to optimize its retail footprint.

One bright spot for Bed Bath & Beyond was sales from its digital channel, which increased 82% in the quarter, and represented almost two-thirds of total sales. Digital sales include its curbside pick up and buy-online-pick-up-in-store services.

Read More: UBS has compiled an investing playbook for all the possible election outcomes. Here are the 6 trades it recommends to profit from a Trump triumph and 10 for a Biden blue wave. The company declined to provide financial guidance for 2020 due to uncertainties surrounding the impact of the COVID-19 pandemic. While investors were unimpressed with the company's earnings report, as evidenced by the trading activity on Thursday, Bank of America reiterated its buy rating on the firm and increased its price target to $16.50, representing upside potential of 106% from current levels. The bank said "comp sales trends have accelerated significantly through June as stores have reopened," and it's encouraged by the retailer's "commitment to taking out unproductive stores" and continuation of strong growth in digital sales. BofA said it believes investors are "significantly undervaluing a turnaround" of Bed Bath & Beyond's core business, and that there could be "substantial value creation" from the buybuy Baby brand, which is owned by Bed Bath & Beyond. In a CNBC interview on Thursday morning, Bed Bath & Beyond's CEO Mark Tritton remained optimistic on the company's turnaround efforts. "We've seen an acceleration of our potential strengths and opportunities amid the COVID-19 environment," Tritton said. He added, "We're seeing some great numbers in June and beyond, so we're excited about what we have ahead for us." Shares of Bed Bath & Beyond tumbled as much as 23% to $8.00 Thursday. The stock is down 53% year-to-date. Markets Insider NOW WATCH: How waste is dealt with on the world's largest cruise ship See Also: The most accurate analyst covering e-commerce says these 7 stocks will be among the biggest winners of the shift to online shopping The best investing stories of June: Interviews with accurate analysts real estate wizardry world class stock-pickers Bank of America identifies 3 indicators that could make or break the stock market this summer and warns they're all deteriorating fast