UPDATE: Wedbush Securities Downgrades Best Buy to Underperform, Lowers PT

In a report published Wednesday, Wedbush Securities downgraded its rating on Best Buy (NYSE: BBY) from Neutral to Underperform, and lowered its price target from $20.00 to $14.50.Wedbush noted, “We are downgrading our rating to UNDERPERFORM from NEUTRAL, and lowering our 12-month price target to $14.50 from $20 to reflect lower visibility, lack of FY:13 guidance, reluctance to entertain acquisition overtures, and our skepticism about the company's new CEO. We believe Best Buy has been unable to stem sustained comps declines and eroding margins, and remains at a significant disadvantage to its lower-priced and lower-cost peers. Our price target reflects a P/E multiple of ≈ 5x our revised FY:14 EPS estimate of $2.90, and is well below Best Buy's historical 12-15x multiple...In our view, Best Buy requires a plan for substantially reducing its store level overhead. We believe that Best Buy's store level economics place it at a ≈ 10% price disadvantage to online retailers, and we believe that increasingly sophisticated consumers with mobile Internet access will value lower prices over service, ultimately making Best Buy's big boxes obsolete.”Best Buy closed on Tuesday at $17.91.