Bed Bath and Beyond (NASDAQ:BBBY) Will Remain Challenged Says FBR

Through at least the early part of 2011, FBR capital sees Bed Bath and Beyond (NASDAQ:BBBY) continuing to struggle, and maintain their "Underperform" rating on them.

FBR said, "BBBY is down 73 bps since 9/23/10, for underperformance relative to the broader equity market of 738 bps. We expect further lackluster performance for the stock as we head into the end of the year here, and into the earlier part of 2011E. This is the case as the home furnishings sector cycles comparisons against the pickup in home and home decor trends last year. The industry benefited from pent-up demand and a 25% reduction in competitive capacity in 2008/2009, such as with the removal of former competitor Linens N Things (LIN). The industry cycles the second anniversary of the liquidation of LIN this month, November. We expect a moderation in sector trends to continue, and we do not think this will be great for the stock prices."

Bed Bath and Beyond closed Monday at $43.18, gaining $0.10, or 0.22 percent. FBR has a price target of $40 on the retailer.