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Tuesday, April 16, 2024

Top Trades for Thu, 16 Apr 2020 15:15 – BBBY

phil
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Top Trades for Thu, 16 Apr 2020 15:15 – BBBY
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Bed Bath & Beyond seen surviving the demand shock
  • Baird checks in on Bed Bath & Beyond (BBBY +17.2%) after the retailer's earnings reporte.
  • "While we believe BBBY has enough liquidity to survive this downturn, the unprecedented demand shock adds another layer of complexity to what is already a difficult turnaround process,' reads the firm's update.
  • Q2 and Q3 are seen dropping 5% to 20% from last year's levels.
  • Barid keeps a Neutral rating in place and lowers its price target to $5 from $10 to reflect reduced EPS estimates.
  • Previously: Bed Bath & Beyond +13% after slight sales beat (April 15)

Very tempting down here!  I think, for the LTP, we may as well pick up the 50 of the BBBY 2022 $3 ($3.55)/10 ($1.45) bull call spreads at $2.05 ($10,250) and sell 20 of the 2022 $5 puts for $2.62 ($5,240) for a net $5,010 entry on the $35,000 spread so $29,990 (598%) upside potential if BBBY can get back to $10 in 20 months.    

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