Oppenheimer Lowers HGG Rating To Perform; PT Drops To $20

Oppenheimer is lowering its rating on HHGregg, Inc. (NYSE: HGG) to Perform from Outperform.

“Over the past several quarters HGG has worked aggressively to capitalize upon real estate dislocations in markets across the US and garner the support of leading CE manufacturers looking to partner with a service-focused and growing retail chain,” Oppenheimer writes.

“We remain upbeat on longer term prospects for HGG. Near term, however, we are increasingly concerned that with the TV product cycle weak and incremental new store investments likely to mask underlying profit growth within the company's existing base of units, the market will remain unwilling to award shares any type of growth-oriented multiple.

“Our new $20 price target is down from $27 and about consistent with current levels.”

HHGregg currently trades at $18.49.