Best Buy, Inc. (NYSE: BBY) shares were upgraded this week based on the likely bankruptcy of consumer electronics competitor Circuit City Stores, Inc. (NYSE: CC). In fact, analyst Bradley B. Thomas stated that, "We believe a Circuit City bankruptcy has become a question of 'when' rather than 'if'."

Circuit City, which recently fired its CEO after years of incredibly subpar performance and absolutely dismal results, isn't going anywhere right now. It's not even drawing interest from potential suitors. When you can't find a buyer, you know there's trouble brewing (even before the financial system went berserk in September). Big trouble. The company is looking at "strategic alternatives" to its business, which have to include declaring bankruptcy.

Thomas' assessment of Best Buy takes into consideration the weakness in the consumer economy and the impending bad retail holiday season, but Circuit City's situation could be more powerful than either of those factors. He also points to the fact that BBY shares have dropped 45% in just over a month, making it an attractive buy given Circuit City's weakness. If the consumer electronics industry in the U.S. has one large competitor after Circuit City folds up shop, it will be in prime position. And that position will be held by Best Buy.

After visiting a Best Buy, Inc. (NYSE: BBY) location yesterday, I was reminded again why the nation's largest consumer electronics retailer is basically trouncing its nearest competitor, Circuit City Stores, Inc. (NYSE: CC).

The employees are helpful and upbeat (a rarity in the holiday season) in addition to being friendly. If Best Buy's employees are any indication, the retailer will have a whale of a holiday sales season. It was very busy inside the location I visited, but the employees seemed to be handling the rush with aplomb.

And, it's just not me. Although I visited the retailer on Cyber Monday (after visting its website, of course), Piper Jaffray has raised its price target on Best Buy from $55 to $56. That's not a large upgrade, but with a "Buy" rating on the stock and references to a very strong Black Friday, Best Buy may be the retailer to beat this holiday shopping season. Dare I say it -- even above general merchandisers like Wal-Mart Stores, Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT).

In addition to the stock price upgrade, Piper Jaffray upped its estimate on current-quarter earnings per share, from $0.39 to $0.44, bypassing the analyst industry consensus of $0.40. Citing strong categories like laptop computers, video game hardware and software, navigation devices, and LCD televisions, Piper Jaffray also upped current-quarter same-store sales growth from its previous estimate of 3% to a revised 4%.