Oppenheimer Downgrading Best Buy (BBY)

Oppenheimer & Co. is downgrading Best Buy BBY to Perform from Outperform and is lowering its price target to $39 from $53. In the note sent to clients, Oppenheimer writes, "We are lowering our rating on BBY to Perform from Outperform and our price target to $39 from $53. For the past few months, we have recommended BBY as an attractive play on strengthening consumer demand for gadget technologies and improving financial controls at the chain. Weaker than expected results from Best Buy yesterday serve as a stark reminder that despite recent successes in the company's new initiatives, ongoing sluggishness in the TV category remains a meaningful drag on results and a significant impediment to multiple expansion for BBY shares. TV sales are likely to remain soft at BBY through at least early 2011. EPS upside potential is therefore likely to stay subdued, and we are hard-pressed to foresee the shares breaking out from their current historically low valuations near term." Shares of BBY are off 26 cents in pre-market trading to $35.26.