Best Buy stock slipped Thursday after a top retail brokerage firm downgraded shares on fears that Wall Street has already priced in the store's rebound.
Telsey Advisory Group cut its rating to market perform from outperform, sending shares sliding. Best Buy closed down 0.7 percent Thursday.
"The low hanging fruit has already been picked, and going forward, the company is increasing investments in technology, labor, and supply chain to maintain its leadership position," Telsey analyst Joseph Feldman wrote to clients. "The overall product cycle remains average in 2018, with no highly-anticipated launches. Smart-home devices and appliances remain growth areas, while we anticipate weaker trends in computing and mobile phones."
Feldman added that given Best Buy's impressive performance in 2017, the new year will likely make for challenging same-store sales comparisons — a closely watched metric in retail. He anticipates same-store sales of -1.5 percent in the second quarter and -1 percent in the third quarter.
Best Buy shares are up roughly 70 percent the last 12 months after the retailer showed there still may be a place for an in-store experience with electronics.
The analyst's new 12-month price target of $81 represents 5 percent upside from Wednesday's close.
Dana Telsey, CEO of Telsey Advisory Group, is a widely followed voice in the retail space. Before founding her firm in 2006, she spent over a decade at Bear, Stearns & Co. covering retail as a senior managing director and is consistently ranked as a top stock picker in the industry.