Morgan Stanley Reiterates Equal-Weight Rating on Best Buy Co. Following Mixed 2Q13 Results

In a report published Thursday, Morgan Stanley analyst David Gober reiterated an Equal-Weight rating on Best Buy Co. BBY. In the report, Morgan Stanley noted, “Shares have risen 170% YTD, and while we believe BBY is a viable business with a strong new management team, it operates in a volatile industry with both competitive and product cycle challenges still remaining. Management turnover was a theme in 2012, with new CEO Hubert Jolly and CFO Sharon McCollam officially beginning their tenures late in the year. With a large ‘Renew Blue' plan underway, execution risk exists as market expectations have risen. At 13x forward earnings, 5-6x forward EV/EBITDA, we believe valuation currently reflects industry and execution headwinds and opportunities for cost cuts and comp reacceleration. Best Buy Co. closed on Wednesday at $31.67.