Best Buy: Piper Downgrades on Weakening TV Prices

Piper Jaffray analyst Mitchell Kaiser this morning cut his rating on Best Buy (BBY) shares to Neutral from Buy, and chopped his price target on the stock to $49 from $54. “We are concerned about gross margin erosion in the home theater department as a result of what we expect will be significant flat panel TV price declines in the coming months,” Kaiser writes.

Kaiser says he is not making a negative call on Q2; in fact, he increased his estimate for the quarter to 59 cents, from 57 cents. But he writes that “channel checks … have revealed weak consumer demand for large flat panel TVs during the summer months and the early weeks of the important fall selling season.” He adds that the weak demand has created excess inventory “throughout the supply chain” that will likely have “negative gross margin implications” for the next two quarters. He trimmed his FY ’09 EPS estimate to $3.30 from $3.37.

Read the rest of this post


Must-Reads from other Websites

Panos Mourdoukoutas

Why Apple Should Buy China’s Xiaomi

Paul Graham

What I Didn’t Say

Benjamin Bratton

We Need to Talk About TED

Mat Honan

I, Glasshole: My Year With Google Glass

Chris Ware

All Together Now

Corey S. Powell and Laurie Gwen Shapiro

The Sculpture on the Moon

About Voices

Along with original content and posts from across the Dow Jones network, this section of AllThingsD includes Must-Reads From Other Websites — pieces we’ve read, discussions we’ve followed, stuff we like. Six posts from external sites are included here each weekday, but we only run the headlines. We link to the original sites for the rest. These posts are explicitly labeled, so it’s clear that the content comes from other websites, and for clarity’s sake, all outside posts run against a pink background.

We also solicit original full-length posts and accept some unsolicited submissions.

Read more »