Bed Bath & Beyond Inc BBBY Equities have seen heightened volatility in 2023 after news revealed it was exploring strategic alternatives, including a possible bankruptcy.
With new reports suggesting bankruptcy is nigh, don’t forget Jim Cramer believes target company TGT benefits from Bed The sinking of Bath & Beyond.
“When you get a going concern letter, it really means you just get in real trouble and have to close a lot of businesses,” Cramer said on CNBC’s Squawk On The Street in January. “And I know from my work that Target has the most stores next to Bed Bath.”
What you should know: Earlier in the year, Bed Bath & Beyond delivered preliminary results that were well below expectations, blaming its underperforming on lower customer traffic and stock availability.
bed bath adding, “The Company has concluded that there are significant doubts as to the Company’s ability to continue as a going concern,” noting that it is “considering all avenues and strategic alternatives.” Now it seems that a Chapter 11 filing is closer than ever.
Cramer told CNBC that one of those avenues will involve a significant number of store closures. Due to Target’s retail store’s proximity to Bed Bath, he believes the dissolution of the home furnishings retailer will be positive for Target.
“If the smoke clears, Target is the winner of the bed-bath problems,” Cramer said.
Target stock is trading lower in the short-term as it continues to cycle through excess inventory, but after a dip, investors “have to watch,” he added.
“I don’t think Target is doing nearly as badly as the analysts are saying because they’re not projecting any problems with Bed Bath. And these problems will play right into your hands this firm‘ Cramer said.
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