hhgregg (HGG) Looks Cheap but Facing Secular Headwinds

November 5, 2012 7:59 AM EST Send to a Friend
Get Alerts HGG Hot Sheet
Price: $7.75 -3%

Rating Summary:
    2 Buy, 10 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 20 | Down: 40 | New: 50
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Jefferies maintained a Hold rating on hhgregg (NYSE: HGG) and raised its price target to $8.00 (from $7.00).

"HGG shares look 'cheap' on a P/E basis, but we believe this continues to reflect concerns about the broader CE industry, particularly TV weakness, technology convergence, a shift to online buying and weak product cycles," said analyst Daniel Binder.

Binder thinks sales at hhgreegg will remain weak, though there could be a slight improvement in the second half.

"Our $8 price target is based on HGG shares selling at about 9x our FY14 EPS estimate of $0.90. This is in line with its 1-year average P/E multiple of 9x, which seems low, but is not unusual for retailers facing secular headwind," said Binder.

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

Shares of hhgregg closed at $7.60 yesterday.


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