Last week we saw that Goldman Sachs cut the rating to Sell from an already cautious Neutral. In late February, UBS maintained a Sell rating. We also were confused by its choice for a turnaround CEO due to industry background changes.
Merrill Lynch believes that many of the positive catalysts that it had predicated in its prior Buy rating are largely priced into the stock. The company is exiting its loss-making partnership with Target Corp. (NYSE: TGT). What is interesting is that this downgrade includes a price target increase to $4.00 from $3.50, based on a 0.1-times sales multiple, although upside looks limited until a clear strategic plan is presented. The team here thinks that the the new CEO direction will be very important, but also said that any turnaround plan is likely not coming until the second half of this year.
This sounds yet again like one more example of how and why RadioShack will have to face its future alone.
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