Maxim Group Maintains a 'Buy' on Barnes & Noble (BKS); Coming Into Play? Current Market-Cap Makes For Possible Bite-Sized Deal
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Price: $6.49 --0%
Rating Summary:
2 Buy, 8 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 27 | Down: 45 | New: 5
Rating Summary:
2 Buy, 8 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 27 | Down: 45 | New: 5
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Maxim Group maintains a 'Buy' on Barnes & Noble (NYSE: BKS).
Maxim analsyt said, "BKS lowered guidance for FY12 (April) and is now estimating NOOK revenues of $1.5B for FY12 vs. prior guidance of $1.8B still up 70% y/y from $880M last year. Our original estimate of $1.6B was less than management's guidance. We believe the size of the miss - BKS guided on Dec 1 - is bringing the company into play...BKS announced it is exploring strategic options for separating its growing NOOK business. Liberty Media Corporation (Nasdaq: LMCA)( Buy, $97 PT) - 17% of the equity via a convert and 2 board members - CEO Maffei at Citi's conference last night suggested that they thought of the company as separate businesses - digital and the stores. He further suggested that the Nook with about a 23% e-reader share and 27% share of e-books is successful...However, that with competitors such as Apple (Nasdaq: AAPL)(NotRated) and Amazon (Nasdaq: AMZN)(NR), BKS might need strategic partners to help fund the growth. Companies such as Wal-Mart (Nasdaq: WMT)(NR) (market cap $203B) no longer have DVD's as a lost leader to create foot traffic with and are losing on the customer loyalty front to Amazon (Nasdaq: AMZN)."
"The announcement of sale of NOOK should be a positive catalyst and is masked by the negative news of lowered guidance: BKS enterprise value is approximately $1B (market cap $800M -for simplification purposes we convert LMCA's stake of 12M shares plus primary of 57M for a total of 69M plus net debt of $250M). On a conservative basis, the NOOK alone with $1.5B in e-book and e-reader revenue could be worth $900M at 0.6x revenues, about $13 per share. However, Nook is growing 70% compared to Dell (Nasdaq: DELL) at 2%."
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 $13.55 yesterday.
Maxim analsyt said, "BKS lowered guidance for FY12 (April) and is now estimating NOOK revenues of $1.5B for FY12 vs. prior guidance of $1.8B still up 70% y/y from $880M last year. Our original estimate of $1.6B was less than management's guidance. We believe the size of the miss - BKS guided on Dec 1 - is bringing the company into play...BKS announced it is exploring strategic options for separating its growing NOOK business. Liberty Media Corporation (Nasdaq: LMCA)( Buy, $97 PT) - 17% of the equity via a convert and 2 board members - CEO Maffei at Citi's conference last night suggested that they thought of the company as separate businesses - digital and the stores. He further suggested that the Nook with about a 23% e-reader share and 27% share of e-books is successful...However, that with competitors such as Apple (Nasdaq: AAPL)(NotRated) and Amazon (Nasdaq: AMZN)(NR), BKS might need strategic partners to help fund the growth. Companies such as Wal-Mart (Nasdaq: WMT)(NR) (market cap $203B) no longer have DVD's as a lost leader to create foot traffic with and are losing on the customer loyalty front to Amazon (Nasdaq: AMZN)."
"The announcement of sale of NOOK should be a positive catalyst and is masked by the negative news of lowered guidance: BKS enterprise value is approximately $1B (market cap $800M -for simplification purposes we convert LMCA's stake of 12M shares plus primary of 57M for a total of 69M plus net debt of $250M). On a conservative basis, the NOOK alone with $1.5B in e-book and e-reader revenue could be worth $900M at 0.6x revenues, about $13 per share. However, Nook is growing 70% compared to Dell (Nasdaq: DELL) at 2%."
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 $13.55 yesterday.
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