4 Analysts Downgrade Bed Bath & Beyond Amid Short Squeeze, and Two More Numbers to Know
Three numbers to start your day:
4 Wall Street Analysts Downgrade Bed Bath & Beyond Shares in Span of 48 Hours
The company didn’t report any bad news. Instead, analysts have cut their ratings on the home-goods retailer’s stock because it rallied more than 80% in one week.
It is part of the blistering rally in widely shorted stocks, such as GameStop, Express, BlackBerry, and Nokia. Individual traders have been chatting on message boards about buying up shares — and options — in those formerly unpopular stocks, and pushing prices higher.
But Wall Street is worried that the rally has gone too far, and analysts are responding with downgrades and words of caution. 85% of analysts now rate Bed Bath & Beyond at Hold or Sell, according to FactSet, up from 70% last month.
AT&T Gained 1.2 Million New Subscribers Last Month
The telecommunications giant reported strong subscriber growth in its latest quarterly financial report Wednesday. The figure beat even the most optimistic Wall Street forecasts, and was more than double the average analyst’s estimate. AT&T also posted strong phone sales after offering promotions around the holidays.
But the good news wasn’t enough to prompt gains in the stock. The shares fell nearly 3% in the hours after its report.
That is because AT&T has several other challenges. It is still in the middle of a yearslong effort to pay down debt. The company also had to take a roughly $15 billion write-down on its struggling DirecTV business. But all in all, investors don’t seem too pessimistic — the stock was outperforming the S&P 500 by Wednesday afternoon.
Federal Reserve to Hold Interest Rates Near Zero
That was according to its Wednesday statement.
The central bank cut rates near zero last year when Covid-19 hit. That ended up being just the first step in a historic easing program. The Fed later bought government and corporate bonds in an attempt to relieve the investor panic that came at the start of the pandemic.
Now, as vaccines start to circulate and parts of the U.S. economy prepare to reopen, investors are wondering when the Fed is going to begin withdrawing its support.
But officials have pledged that interest rates will remain low until the U.S. is well past the pandemic. What investors should watch is the outlook for the Fed’s Treasury-bond-buying program. Central bankers will start reducing the size of their purchases a long time before they start thinking about raising rates. And that might not happen this year either.
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Write to Alexandra Scaggs at [email protected]
