FBR Capital Raises Estimates on RadioShack (RSH)

November 9, 2009 7:27 AM EST

FBR Capital raises estimates and price target on RadioShack (NYSE: RSH).

FBR analyst says, "We raise our EPS estimates and price target on the heels of RSH's release after the close this past Friday, 11/6, that it will be adding the Apple iPhone (Nasdaq: AAPL) for the first time. The iPhone is another significant vote of confidence for RadioShack's wireless business. There are some important strengths for RSH versus its peers in wireless (Wal-Mart (NYSE: WMT) and Best Buy (NYSE: BBI)) that we expect will enable RSH to execute as well, if not better, in wireless: new senior management with a dedicated focus on wireless; smaller, more nimble store size; and finally, a trained, commissioned associate base. The iPhone release comes on the heels of other successes within wireless for RadioShack, such as a 40%, $104M, YOY rise in wireless revenue last quarter, 3Q09A; the addition of T-Mobile as a third postpay carrier on 8/19/09; the new test within 100 Target (NYSE: TGT) stores for kiosks there; and the addition of Verizon within Sam's Club kiosks."

"We leave our 2009E earnings estimates unchanged, where our $0.60 per share 4Q09 EPS estimate is already 4 cents per share ahead of consensus of $0.56. We raise our 2010E EPS estimate from $1.75 to $2.00 per share. The Street looks too low at $1.57 for 2010E. We currently reflect $2B in wireless revenue for 2010E, up from $1.34B in 2009E, or 49.9% of corporate store sales, up from 43.1% as of 3Q09A."

The firm reiterated their Outeprform rating and raised their price target from $23 to $26 per share.

To see more analyst ratings on RSH Click Here.

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