When Best Buy, Inc. (NYSE: BBY) said during the recent holiday season that it was a very tough time in the retail industry, many believed it. Just a few short months later, the largest consumer electronics retailer in the U.S. went on to have a decent quarter in the midst of the current recession -- due in part to the vanishing of its largest direct competitor, Circuit City Stores.So, things can teeter-totter a bit from quarter to quarter based on all kinds of variables. So can analyst opinions, which are a toss-up in many cases. No mater how much quantitative analysis is done, predictions are off the mark all the time. Stacey Widlitz with Pali Capital set a "sell" rating on BBY shares this week with a price target of $32. BBY shares are sitting just under $40 this afternoon and unless something goes horribly wrong with the company, won't drop down that low any time soon. Will they?
Ms. Widlitz has been wrong before on Best Buy. One of the questions that she may not have fully considered is the continued displacement of Circuit City's sales -- they aren't going to shuffle into Wal-Mart Stores, Inc. (NYSE: WMT). Best Buy and even online online electronics retailers will probably take the majority (if not all) of Circuit City's market share on an ongoing basis. Will we see BBY hit $32 any time soon? Even riding the recession, the retailer has everything going for it. Don't expect a decline that large.
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