Zacks Investment Research upgraded shares of RadioShack Corporation (RSH) from UNDERPERFORM to NEUTRAL on June 27, 2012, with a target price of $4.25.
We are upgrading our recommendation on RadioShack to Neutral based on its current valuation, which plunged more than 75% in the last year and is trading at the low-end of its 52-week price range. We believe further stock price downslide is a remote possibility at this stage. Nevertheless, the nightmare of RadioShack continues to persist. Firstly, the company's core consumer electronics retail business is on secular downtrend and is unlikely to be revived in the near future. Secondly, the customers increasingly prefer online purchase instead of visiting brick-and-mortar retail stores. Loss of footfall is taking a toll on RadioShack's mobility business, on which the company is banking for its future growth. Thirdly, instead of computers and cameras, majority of consumers prefer tablets and smartphones, which are less profitable for the retail industry. We believe a turnaround may take more time than previously expected.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
To get a free copy of the research report on RadioShack Corporation (RSH),
click here.
For more information about research offerings from Zacks Investment Research, visit
Zacks.com .
Be the first to comment