Barclays Maintains an 'Underweight' on Barnes & Noble (BKS); NOOK: Revenue Gains Slow Despite Greater Investment Spend

Barclays maintains an 'Underweight' on Barnes & Noble (NYSE: BKS) price target of $10.00.

Barclays analyst says, "2Q EPS below our estimate: BKS reported adjusted fiscal 2Q EPS of $(0.11), below our estimate of $(0.08) and compared to $(0.12)...NOOK revenues down 21% sequentially; greater investment spend ahead: While NOOK revenues increased 85% y/y from $119M to $220M, they were down 21% sequentially from 1Q, when NOOK revenues increased 140% to $277M."

"BKS shares have fallen significantly today in response to greater focus on
fundamentals, which we believe have eroded. Prior to this, shares had rallied
significantly on speculation over the potential monetization of value in the company's BN.com and NOOK businesses. Data released today suggest a slowdown in the company's important digital initiatives. We urge continued focus on the company's fundamentals, which are poor in our view, instead of on speculation over possible strategic moves."

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

Shares of Barnes and Noble closed at $14.59 yesterday.

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