New York, August 7 (FinanceEnquiry.com) – Analysts at Moody’s Investors Service changed the outlook for Best Buy Company (NYSE: BBY) from stable to developing and confirmed the Baa2 senior unsecured rating of the company.
In a research note published yesterday, the analysts mention that the change in outlook considered the uncertainty regarding the potential effect on the capital structure of the company surrounding the announced potential bid by former Chairman to take BBY private at a price of between $24-26 per share.
The long term ratings of the company continue to indicate the company’s position as the largest dedicated consumer electronics retailer, its highly diversified and innovative product line, its strong credit metrics, debt/EBITDA for the period of 12-month has been around 2.7 times and its balanced financial policy.
Another major reason includes the presence of internet retailers, mainly Amazon (NASDAQ: AMZN) and discounters and warehouse clubs as main and formidable competitors, specially around the key holiday and Super Bowl selling season as well as highly promotional nature of the consumer electronic segment.
However, the stable rating outlook indicates Moody’s expectation that BBY would continue to profitably defend its market share and hence, credit metrics would not change materially apart from the difficult consumer environment, the analysts say.
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