Credit Suisse Cuts Price Target on Barnes and Noble (BKS) Despite the Offer
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Price: $22.16 -1.38%
Rating Summary:
2 Buy, 3 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
Rating Summary:
2 Buy, 3 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
Trade BKS Now!
Credit Suisse is maintaining its Neutral rating on shares of Barnes and Noble (NYSE: BKS), but is lowering its price target from $21 to $19 as it wonders if the offer was actually the epilogue to Barnes as a public company.
The firm notes that based on Liberty's history, it appears unlikely that Mr. Malone will raise his bid significantly higher.
With the formal auction is still officially underway and no bidders stepping up, the independent committee's fiduciary responsibility to seek out new offers is now significantly limited.
With Mr. Burkle controlling just under 19% of the stock, or 27% of the non-Riggio portion, he still has some say in the offer and may come out with another competing offer. The firm remains skeptic that he will come out with a competing offer since he has not yet and the closing date comes closer.
Credit Suisse comments, "there are those that will protest that the earnings power of the company points to much better value that $17 a share may represent. However, there is a serious question whether BKS on its own can continue the investments required to keep up with Amazon (Nasdaq: AMZN), Apple (Nasdaq: AAPL), Sony (NYSE: SNE) or Microsoft (Nasdaq: MSFT). While many may be frustrated, Liberty's offer, with a little sweetener, may be the best. To some degree that is frustrating, as the Nook technology in the right hands appears to be a real winner, so it will be interesting to see if a technology company steps up."
For more ratings news on Barnes and Noble click here and for the rating history of Barnes and Noble click here.
Shares of Barnes and Noble closed at $18.33 yesterday, with a 52 week range of $8.45-$20.45.
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The firm notes that based on Liberty's history, it appears unlikely that Mr. Malone will raise his bid significantly higher.
With the formal auction is still officially underway and no bidders stepping up, the independent committee's fiduciary responsibility to seek out new offers is now significantly limited.
With Mr. Burkle controlling just under 19% of the stock, or 27% of the non-Riggio portion, he still has some say in the offer and may come out with another competing offer. The firm remains skeptic that he will come out with a competing offer since he has not yet and the closing date comes closer.
Credit Suisse comments, "there are those that will protest that the earnings power of the company points to much better value that $17 a share may represent. However, there is a serious question whether BKS on its own can continue the investments required to keep up with Amazon (Nasdaq: AMZN), Apple (Nasdaq: AAPL), Sony (NYSE: SNE) or Microsoft (Nasdaq: MSFT). While many may be frustrated, Liberty's offer, with a little sweetener, may be the best. To some degree that is frustrating, as the Nook technology in the right hands appears to be a real winner, so it will be interesting to see if a technology company steps up."
For more ratings news on Barnes and Noble click here and for the rating history of Barnes and Noble click here.
Shares of Barnes and Noble closed at $18.33 yesterday, with a 52 week range of $8.45-$20.45.
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