Customers are buying fewer high-priced big-screen TVs from electronics chain HHGregg Inc., an analyst said Tuesday as he
lowered his investment rating on the company's stock.
In a research report, Jefferies & Co Inc. analyst Daniel Binder cut his rating on the merchant to "Hold" from "Buy."
"While we believe the company's appliance sales have picked up with the industry, we are concerned that the company may have a lopsided sales performance ... as TV sales were likely negatively affected by a shift toward smaller screen sizes," Binder wrote.
Smaller TVs, with their typically smaller price tags, are generally less profitable for consumer electronics companies.
Binder maintained his $23 per-share-price target on the Indianapolis-based company. It's set to report third-quarter results in early February.
Meanwhile, Binder expects the retailer to earn 43 cents per share for the three-month period. That's a penny per share below the average expectation of Wall Street analysts surveyed by Thomson Reuters.
HHGregg shares dropped 10.5 percent in Tuesday trading, from $24.22 to $21.67 each.