Shares of Best Buy briefly dipped in the premarket Wednesday after analysts at Credit Suisse released a bearish note on the consumer electronics retailer. The stock ended the day up slightly.
The investment bank downgraded Best Buy to "neutral" from "outperform" and lowered its price target to $31 from $36.50, citing concerns over second-half top-line expectations.
"We still believe there is significant value at this level with Best Buy trading close to prior trough levels, yet we see a more difficult battle between controllable vs. uncontrollable factors this year, which creates uncertainty that may continue to limit upside to the stock in the near term," Credit Suisse said in a Wednesday note to clients.
The bank also said Best Buy's mobile category might not "deliver the improvement needed to hit Q4 comps estimates." This expectation is based on a more modest upgrade to Apple's iPhone 7, which might dampen demand as shoppers postpone phone upgrades.
The analysts also expect that Best Buy's comparisons to last year might be hard to top. Those results benefited from market share the retailer gained from Sears, RadioShack and HHGregg — a feat that will be hard to beat.
Best Buy declined to comment.
Entering Wednesday trading Best Buy's stock had fallen 14 percent over the past year.
BBY 12-month chartSource: FactSet
Disclosure: Credit Suisse provided investment banking services to Best Buy in past 12 months.