Best Buy: Gimme Credit Downgrades to "Deteriorating"
Gimme Credit analyst Carol Levinson late Friday cut her credit rating on Best Buy (BBY) to “Deteriorating” from “Stable.”
In a research note, Levinson notes that the company in the long run should benefit from the bankruptcy and liquidation of Circuit City (CC), Tweeter and “whomever among its competitors might be the next to go.” But she adds that “in the short run it must join the lengthy list of retailers experiencing weaker sales, strained liquidity, and contracting margins.”
Levinson also notes that most of its merchandise is “largely discretionary in nature and margins in electronics were low to begin with even before the latest promotional binge.”