UPDATE: Citi Color On BBY Downgrade, PT Decrease

Citi, which downgraded shares of Best Buy BBY and lowered its PT, is providing some color on the stock. Citi writes, “Despite the stock's pull back over the last few weeks, we are downgrading because we see further downside risk from here based on 1) Likely further multiple contraction given the company's limited NT EPS growth prospects (negative y/y EPS growth in 1H), 2) Continued GM% pressure driven by a commoditizing product channel/competitive pressures, high inventories (+7.5% vs qtd comp trends of -4%) & diminishing positive offset from BBY Mobile, and 3) long term concerns on the size of the box and international prospects. The main risk to our call is BBY's strong FCF yield of 9.5%, which could be used aggressively for share buybacks.” Best Buy closed Thursday at $26.43.