Maxim Group maintains a 'Buy' on Barnes & Noble (BKS); Next Catalyst Could Be A New Investor

July 23, 2012 10:00 AM EDT Send to a Friend
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Price: $20.63 +1.33%

Rating Summary:
    1 Buy, 5 Hold, 3 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 24 | Down: 28 | New: 14
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Maxim Group maintains a 'Buy' on Barnes & Noble (NYSE: BKS) price target of $30.00.

Analyst, John Tinker, said, "The next catalyst could be a new investor in “Newco” – the potential spin-out consisting of NOOK/College stores – perhaps a hardware manufacturer. We believe that BKS is more focused on its NOOK app (digital distribution business) vs. the NOOK hardware business. Ultimately BKS may eventually exit from the hardware business. The fact that “Newco” (the NOOK subsidiary) has not yet been named suggests that BKS has several options as to how to position the NOOK. Additionally another investor should further validate Microsoft’s (Nasdaq: MSFT)(NR) $1.7B valuation, about $20/share. We believe BKS is an inexpensive stock but that it is currently difficult for investors to get their arms around it due to an evolving financial model and uncertainty over Microsoft’s goals."

Tinker also noted that Apple's (Nasdaq: AAPL) in-house approach to integrating software and hardware has had immense success and probably won't/can't be duplicated by Microsoft, IBM (NYSE: IBM)(NotRated), Dell (Nasdaq: DELL)(Buy, PT$16) and BKS's only real risk is with Amazon's (Nasdaq: AMZN) Kindle.

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 $15.07 yesterday.


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