KeyBanc Downgrades hhgregg (HGG) to Hold; Growth Story Intact, But NT Overhangs Remain

KeyBanc downgraded hhgregg (NYSE: HGG) from Buy to Hold.

KeyBanc analyst says, "hhgregg, Inc. (HGG-NYSE) remains one of the more compelling longer-term growth stories in our coverage universe, as this regional retailer continues to expand nationally. While we maintain a positive view on the longer-term growth prospects, the management team, and the current strategy, we believe that 2011 could remain a difficult year, based on the television product cycle, increased competition in the appliance category, limited exposure to the fast-growing tablet category, and investments for future growth. While the stock has significantly underperformed in recent months and a great deal of this sentiment is already baked in, we believe a catalyst may not unfold on a near-term horizon. As such, we are downgrading the stock to HOLD from BUY, with an eye to get more positive again on HGG once we see greater stabilization in the television category..For FY11, we are adjusting our EPS estimate to $1.10�from $1.05, to the lower end of guidance, though still below consensus. Our fiscal 4Q11 EPS estimate of goes to $0.27 from $0.22 previously."

For more ratings news on hhgregg click here and for the rating history of hhgregg click here.

Shares of hhgregg closed at $13.01 yesterday.

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