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Maxim Group Maintains Buy-rating on 'Fifty Shades' of Barnes & Noble (BKS)

August 21, 2012 3:03 PM EDT Send to a Friend
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Price: $23.08 +0.22%

Rating Summary:
    1 Buy, 5 Hold, 3 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 12 | Down: 11 | New: 20
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Maxim Group maintains a 'Buy' on Barnes & Noble (NYSE: BKS) price target of $30.00.

Analyst, John Tinker, said, "On a consolidated basis, BKS generated 1Q13 revenue of $1.45B (up 2.5% y/y), which compares to consensus of $1.48B and our estimate of $1.5B...We are maintaining our FY13 EBITDA estimate of $181M (up 6% y/y). The principal short term stock driver, in our opinion, is that Microsoft (Nasdaq: MSFT)(NotRated) close on its $300M equity investment and $305M longer-term non-recourse financing of “Newco” (BKS College and NOOK divisions) – management confirmed that it was on track to close the transaction in the Fall but did not provide a date."

Tinker noted that the retail segment revenues were up and comparable same-store sales were lifted 4.6% as Fifty Shades of Grey helped bolster in-store sales (along with Borders store closure). BN.com sales were down.

Tinker concluded, "We believe BKS is an inexpensive stock, but investors find it difficult to value the company due to an evolving financial model and uncertainty over Microsoft’s goals."

For an analyst ratings summary and ratings history on Barnes & Noble click here. For more ratings news on Barnes & Noble click here.

Shares of Barnes & Noble closed at $12.35 yesterday.




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