RadioShack (RSH) Has Hands Tied But Turnaround Not Impossible

February 28, 2013 9:36 AM EST
Get Alerts RSH Hot Sheet
Price: $0.24 --0%

Rating Summary:
    0 Buy, 10 Hold, 6 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 23 | Down: 34 | New: 34
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RadioShack's problems are well known on Wall Street. Among other difficulties, the company's business model is built on the wireless market, a part of the economy described as "mature" by analysts at Goldman Sachs. This results in margin pressure.

But Radio Shack isn't without hope in the view of Goldman analyst Matthew J. Fassler. He thinks RadioShack management is "credible" and may offer hope.

"RSH has the opportunity for a turnaround under the new leadership, but with limited strategic opportunity, and limited financial flexibility, in our view."

"In the interim, the company has the resources to stay liquid through 2013 under our base case and downside scenarios, despite high leverage and minimal fixed charge coverage," said the analyst.

Goldman Sachs maintained a Neutral rating on RadioShack Corp. (NYSE: RSH) price target of $2.90.

For an analyst ratings summary and ratings history on RadioShack Corp. click here. For more ratings news on RadioShack Corp. click here.

Shares of RadioShack Corp. closed at $3.28 yesterday.

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