UPDATE 1-RESEARCH ALERT-Bear Stearns downgrades Best Buy

lunedì 7 gennaio 2008 13:48

 (Changes source, adds analyst comments and share movement)
 Jan 7 (Reuters) - Bear Stearns downgraded Best Buy Co Inc
(BBY.N: Quotazione) to "underperform" from "outperform," citing a slowdown
in product cycle with the resulting pressure on sales and
margins, and the likely shift in market share to discounters.
 Bear Stearns' analyst Christopher Horvers noted that
revenue growth at Best Buy was most correlated to gross
domestic product, industrial production and real disposable
income growth.
 "Given recent macro data, including worrisome trends in
payroll reports, this sector is positioned poorly in such an
environment," he added in his note to clients.
 Hovers also said that factory sales of electronics are
expected to almost half to 6 percent in 2008.
 In addition to the slowdown, a negative mix shift in
margins is occurring with increased sales of lower margin
products and lower sales of higher margin products, he added.
 Shares of the top U.S. consumer electronics retailer were
down more than 2 percent at $46.60 in pre-market trade, after
closing at $47.61 Friday on the New York Stock Exchange.
(Reporting by Tenzin Pema in Bangalore; Editing by Himani