Matthew Fassler said in a client note that the seller of home goods and other products has been losing market share over the past four quarters, partly because of slowing sales growth for Keurig products.
Bed Bath & Beyond is also facing tough competition from Amazon, which tends to have lower prices before accounting for coupons. It is also getting harder to get online shoppers to make impulse buys, the analyst wrote.
While acquisitions have been looked at as a way to bolster core merchandise offerings, Fassler said that other than Buy Buy Baby, buyouts haven't helped the Union, N.J., company's growth much.
The analyst lowered Bed Bath & Beyond Inc. to "Sell" from "Neutral" and cut its price target to $56 from $66.
Bed Bath & Beyond's stock stock declined $1.72, or 2.9 percent, to $58.06 in morning trading. The shares have traded in a 52-week range of $54.33 to $75.84.