Wedbush: GoPro A Key Black Friday Item, Best Buy May See Margin Compression
As Cyber Monday begins, many investors are anxiously awaiting results from retailers' Black Friday performance.
Wedbush's Michael Pachter updated investors in a note on Sunday to mixed findings.
Best Buy: Price Points Lower, Margin Compression Likely
According to Pachter, Best Buy Co Inc (NYSE: BBY) offered its customers a similar scale and scope as it did a year ago with compelling doorbuster deals. The analyst notes that the company's front page of its advertising mailer was similar from a year ago, but the pricing of products was consistently lower.
Pacther does state that Best Buy may have seen volume growth during Black Friday although its margins are likely to compress.
In addition, Pachter found that competition from Amazon.com, Inc. (NASDAQ: AMZN) was fierce as the online retailer offered "broader deals and scope" while advertising its pricings as everyday low prices, suggesting the company may not raise its prices after the "Black Friday Deals Week."
GoPro: Strong Sales Throughout The Holiday Expected
According to Pacther, GoPro Inc (NASDAQ: GPRO) products proved to be a "key" Black Friday item, specifically the Hero4 model that "sold very well" at Best Buy as well as Wal-Mart Stores, Inc. (NYSE: WMT). The analyst adds that GoPro products are expected to continue seeing strong sales throughout the holiday shopping season.
Best Buy's promotion of offering a $20 gift card may have given away significant martin for the retailer, according to Pachter, while Amazon is expected to be the "predominant market share leader" for GoPro products throughout the holiday given its shipping conveniences.
Shares of Amazon.com are Neutral rated with a $330 price target.
Shares of Best Buy are Underperform rated with an $18 price target.
Shares of GoPro are Outperform rated with a $98 price target.
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