RadioShack Corp. (NYSE:RSH) is down again pre-market, this time on an analyst downgrade. Citigroup has slashed its rating from what was already a cautious "Hold" down to the ugly "SELL" rating. Part of the problem: those darn cell phone sales are slow and pressuring the company’s business. The outlet is losing market share as well. Unfortunately, having only a couple or few choices in cell phone providers in each market and with all of them selling direct it seems customers are more interested in signing up directly with a provider store that has all of their phone choices on the spot.
The prior target from Citigroup had been $32.00, but the new target is now $20.00 after this sell rating. We noted yesterday how RadioShack is still shrinking. RadioShack has already given back half of its post-implosion gains from last year to this year. It seems as though the easy money that was to be made off of Julian Day stepping into the company has been made. Now the company has to really show what it is worth to continue driving gains rather than riding off its first turnaround efforts.
Julian Day is a stallion, that isn’t in question. But the easy money off of him has come and gone. Shares are down close to $10.00 from the highs just in the last month, and it’s hard to tie a 30% drop merely to the weak market of last week. Shares are gapping down over 2% to just under $25.00 in pre-market trading.
Jon C. Ogg
July 31, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
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