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.
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