UPDATE: Citigroup Downgrades Bed, Bath & Beyond

In a note released Friday, Citigroup downgraded Bed, Bath & Beyond (NASDAQ: BBBY) from Buy to Neutral and reduced the price target from $85 to $72.

Citigroup has noted Bed, Bath & Beyond's outlook indicates that will post a decelerating top-line for the second year in a row. The note explains this is due to a slowing new stores growth rate, as well as "modest" comparable growth. In addition to this, Citigroup is concerned with the "increasing negative impact" of coupons on gross margin.

Citigroup analysts note that while tech investments by Bed, Bath & Beyond may improve the customer's omni-channel experience, these investments will "continue to deliver and weigh on EPS".

Looking to the competition, Citigroup notes Williams-Sonoma as a better way to gain exposure to favorable home furnishing trends.