RadioShack Downgraded to “Market Perform” at FBR Capital (RSH)

Electronics retailer RadioShack Corporation ( RSH ) on Monday caught a downgrade from analysts at FBR Capital Markets on multiple retail concerns. The firm said it downgraded RSH from “Outperform” to “Market Perform” with a $20 price target. That target implies a 9% upside from the stock’s Friday closing price of $18.36. An FBR analyst commented, “We downgrade RadioShack for the time being. Sales of gadgets, such as navigation, digital imaging, and portable audio, have been soft for others in the sector this holiday season, as smartphones and tablets have cannibalized these types of products. The personal electronics and modern home categories represent collectively 20% of RSH sales, and our Black Friday checks at the start of the holidays suggested that RSH holidays (beyond wireless) probably started off soft. The expected loss of the wireless kiosk agreement with Sam’s (announced after the close Friday 1/7/11) will hurt earnings by more than we would have expected. Finally, we require visibility into when RSH will have an agreement with Verizon (NYSE: VZ) as a fourth postpay carrier.” RadioShack shares fell 29 cents, or -1.6%, in premarket trading Monday. The Bottom Line Shares of Radio Shack ( RSH ) have a 1.36% dividend yield, based on Friday’s closing stock price of $18.36. The stock has technical support in the $16 price area. If the shares can firm up, we see overhead resistance around the $20 price levels. RadioShack Corporation ( RSH ) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars. Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

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RadioShack Downgraded to “Market Perform” at FBR Capital (RSH)

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