Goldman Sachs Downgrades Best Buy Co. (BBY)

Goldman Sachs is out with a research report this afternoon, where it removes Best Buy Co. BBY from its Americas Buy List; the stock is now Neutral rated with a $40.00 price target. The GS analysts cited lower than expected TV sales trend improvement, which has forced them to cut estimates on the name. Their 2010 estimate falls by $0.10 to $3.30, below guidance for $3.45 to $3.60 and consensus of $3.44. 2011 and 2012 move down by $0.08 and $0.06 to $3.60 and $3.88, respectively. The analysts noted the company’s attractive valuation and potential to internal margin improvement, but they are more concerned about BBY’s top-line trends. As for valuation, the GS analysts remarked, “Our 12-month price, based on a blend of PE, DCF and normalized earnings valuation falls by $3 to $40.”