ISI: Best Buy's Restructuring

In a research report released this morning by ISI, Best Buy's (NYSE: BBY) management is looking to right size their business with restructuring charges.

According to ISI, “Focusing on smaller formats and closing 5% of its big box stores is a rational strategy to react to secular headwinds in CE. BBY still has $1bn+ of FCF, and a $1bn cash balance which provides funding for radical change. Retailers in other challenged subsectors (i.e. ODP and OMX) do not have that luxury anymore. Ultimately we remain concerned that BBY's initiatives are too little too late. The stock is likely to languish at 7-9x EPS unless it can show signs of getting off the mCommerce hot seat.”

ISI maintains its Hold rating and $25 PT on Best Buy, which closed yesterday at $23.58.