Diamonds and Dogs

9/17/18

Bed Bath and Beyond (BBBY) looks good. The home décor retailer is up 5% thanks to an upgrade. The analyst at Raymond James is looking for better-than-expected same-store sales and earnings ahead of their report next week. The analyst said while the company continues to face compressing margins, his upgrade "simply underscores our view that sales results for F2Q18 now seem more likely to reflect a better consumer sales environment than previously expected, thereby mirroring the results for overall retail and other retailers have posted during late spring and summer." Even with today's rally, the stock is still not far from a 52 week low.

Twitter (TWTR) the worst performing S&P 500 stock today. Twitter is down 5% as an analyst at Moffett lowered his price target on the stock to $21 form $23 and maintained his sell rating. He argues that the "true underlying cost growth" at Twitter is significantly higher than what the company reported in terms of operating expense growth, based on his recent analysts of the company's 10Q. "Moreover, given Twitter's dire need to improve platform safety and invest in more video content, we believe that expenses are set to escalate into the back-half of the year and in 2019," The analyst went on to say, "Consensus estimates appear to be under-estimating Twitter's expense build and will likely need to revise down margin expectations in 2019. With operating leverage flattening out, we believe Twitter's extreme valuation will come back into focus, which wouldn't be a good thing for the stock."