Struggling electronics retailer Best Buy Co., Inc.(NYSE:BBY) has been upgraded by a couple of brokerages.
Barclays Capital upgraded the stock to Overweight from Equal weight, while Stifel Nicolaus has raised it to Buy from Hold.
The company for its part has said that it will “make permanent its holiday price-matching policy” – a statement that has delighted the market.
Best Buy had ben reduced to a `show room’ whereby consumers would go and check out its wares at its outlets and then go ad buy it cheaper online at Amazon or other web-based retailers.
Stifel’s David Schick has set a price target of $23 a share for the stock and has expressed the hope that 2013 would be a transitional year for the company and “in the nearer term this call is about a much clearer plan & dialogue thereof with the Street – with a stronger belief in $2-3 EPS stream than at any time since 2009.”
He noted that there has been an improvement in the management by Chief Executive Hubert Joly and the Chief Financial Officer Sharon McCollam.
The electronics industry is also gaining depth, rom just being Apple-centric to giving more choices to consumers who now have other vendors such as Google, Microsoft, Samsung, Nokia and sometime later Blackberry.
Barclays’ Alan Rifkin also raised the target price of Best Buy to $20 from $13 earlier and said that things are turning around for the company despite increasing competition, a challenging real-estate environment, higher operating expenses and a weak product cycle.
He cites some positive factors, such as holiday shopping data that suggest “stabilizing revenues”; cost cuts that “should rive EBIT growth”; and “opportunities for significant square footage rationalization.”