Goldman Sachs downgraded Best Buy (BBY) to Neutral from Buy and removed the stock from its Americas Buy List this morning. Noting that the stock has rallied in recent weeks, Goldman believes that “sluggish” sales of mobile and computing devices will keep a lid on the shares going forward. Goldman became the second major firm to downgrade Best Buy in the past week, joining Oppenheimer, which cut its rating on the shares last Friday.
WHAT’S NEW: Best Buy has benefited from strong TV sales recently and the stock has responded favorably to this trend, outperforming the market, wrote Goldman analyst Matthew Fassler. However, sales of mobile and computing devices have been disappointing, and that trend will probably continue, partly due to the “increasingly mature wireless market” and the lack of new products in the space, Fassler predicted. The analyst increased his price target on the name to $33 from $32.
WHAT’S NOTABLE: On February 12, Oppenheimer analyst Brian Nagel downgraded Best Buy to Perform from Outperform, citing what he called a challenging consumer spending environment. In the same note, the analyst downgraded Bed Bath & Beyond (BBBY) for the same reason.
PRICE ACTION: In late morning trading, Best Buy fell 2.9% to $29.86.
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