All industries in American business change and evolve over time. In some cases it is due to technological change, internal change within the specific industry, changes in consumer sentiment or just the passage of time. The retail industry, especially the segment that focuses on electronics, has gone through drastic change over the years. Today Jefferies Group Inc. (NYSE: JEF) makes the case to own down, but not out, big-box retailer Best Buy Co. Inc (NYSE: BBY). If they are right, it could be a big money maker.

The graveyard of electronics retailers is littered with the remains of former high flyers like Circuit City, to name just one. Intense competition and pricing pressure put on by retail giants like Wal-Mart Stores Inc. (NYSE: WMT), Costco Wholesale Corp. (NASDAQ: COST) and even smaller, low-end retailers like Conns Inc. (NASDAQ: CONN) compressed margins more and more. E-commerce companies like Amazon.com Inc (NASDAQ: AMZN) and eBay Inc. (NASDAQ: EBAY) compounded the problem, especially when consumers could avoid sales tax. Big-box retailers that carried everything from appliances to televisions to computers not only had to fight the giant retailers and e-commerce companies, but each other.

Through aggressive overexpansion, the iconic Best Buy franchise began slowly to fall apart. Consumers began to use Best Buy and Target Corp. (NYSE: TGT) as “showrooms” for online purchases. This has forced Best Buy to match Amazon’s prices dollar for dollar to stay in the game.

Today in a new report, Jefferies offers up seven reasons to own the struggling former electronics giant. The analysts raised the stock from Hold to Buy and have a $24 price target. The Wall St. consensus estimate for Best Buy is $16.50, which is below its current trading level of $18.40. It is the classic Wall St. showdown, who is right and who is wrong.

Here are the seven reasons from Jefferies to own the stock:

1. New capable management with expertise in turnarounds and growth businesses, both on land and online.
2. Clear cost-cutting opportunities and an evolving plan to go after them.
3. Strong upside to earnings as they look to the fourth quarter of this year and beyond.
4. Expectations have been set low for the first half of 2013 on heavy investment spending, giving management more flexibility.
5. Big investments are being made to improve the multichannel experience, which should result in share gains.
6. Potential sale of European and Chinese operations could fetch $600million to $900 million in our estimation or 10% to 15% of Best Buy’s market capitalization.
7. Shifting investor sentiment could lead to multiple expansion as management shows early signs of success. Opportunities could include a double in stock price over a few years if management’s plan is well executed.

Over the years it has been seen that once Wall S. starts to circle a damaged retailer, things can get dicey. The iconic J.C. Penney Co. Inc. (NYSE: JCP) is in the middle of one of those death spirals now. If Jefferies is right however, and sentiment shifts on Best Buy, this could be a blockbuster trade. Pun intended.

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