Best Buy Gets a Thumbs Up From Goldman Sachs
The investment bank lifted its rating on Best Buy shares to buy from neutral on Friday, making the case that the retailer could benefit from an economic recovery as well as an improved product cycle. And it doesn't hurt that the stock is trading at a reasonable multiple compared to its competitors, according to Goldman's report.
And Goldman Sachs isn't the only bank that's recommending Best Buy. Janney Montgomery analyst David Strasser expects Best Buy to benefit from sales of new 3-D TVs. According to CNBC, Strasser thinks that for every million 3-D TVs sold Best Buy could add 10 cents to its earnings. But is there really a market for 3-D TVs right now?.
While Best Buy shares got a bump in early trading on Friday -- as of 11 a.m., the stock was up almost 2% at $41.17 -- not everyone agrees that Best Buy is a sound investment at the moment. For example, Zack's Equity Research cut its rating of the stock on Wednesday, citing concerns about consumer spending as well as the company's deteriorating gross margins.
Still, in the same breath, Zack's concedes that Best Buy's dominant position in the consumer electronics business enables it to beef up revenue, expand its business and expand its market share.