Griffin Securities Slashes Price Target on RadioShack (RSH)

Griffin Securities slashed its price target on Hold-rated RadioShack Corp. (NYSE: RSH) from $8 to $4 following weak Q2 results.

The firm cited:

• Sales for 2Q ‘12 increased 1.2%, while comps were unchanged at company-operated
  stores- mobility sales grew 3.3%;
  
• EPS loss of $0.21 vs. Griffin’s estimate of loss of $0.01 & Street consensus of $0.03 profit;
  
• Sprint remains a concern- change in promotion for early upgrade (several quarters ago)
  has migrated to harsher credit approval process for new subscribers- fear Sprint can
  evolve into another T-Mobile issue. Verizon has implemented data plan changes during
  2Q which also complicates in-store transactions;
  
• Business model with Target kiosks as it relates to RSH selling mobile phones needs to
  change- current model does not allow RSH to share in accessory sales;
  
• With growth of mobility we had believed overall gross margins would stabilize in lower
  40% range- not realistic for 2012- concern revolves around potential profitless prosperity
  as it relates to sale of smartphones.

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 $3.65 yesterday.

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