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Best Buy is expected to benefit from Sears bankruptcy, analyst says



If the Sears Liquidation will take place, Loop's only unanswered question. Chukumba said the firm believes the only thing stopping Sears from liquidating "is how much longer ESL Investments continues funding the company." ESL Investments is the hedge fund of former Sears CEO Eddie Lampert. It owns about 19 percent of the outstanding Sears shares, in addition to the 31 percent that Lampert personally holds, according to the latest FastSet signup.

In particular, Loop expects Sears to be liquidated as a result of his bankruptcy petition as a result of historical precedents. "The vast majority of large retail bankruptcy filings in recent years have led to liquidations," said Chukumba.

When Sears liquidates, Best Buy may see an additional 47 cents per share of additional customers' adjusted annual revenue. The extra profit would even come when Best Buy competes with various other retailers for Sears and Kmart customers, according to Loop.

J.C. Penney and Walmart, according to Gordon Haskett Research Advisors, are also looking for a boost from Sears foot traffic. Both chains have Sears after Best Buy the next stores. Chaskett also estimated that Kohl's, Macy's and Target's sales should increase.

Loop has a buy rating for the Best Buy stock with a target price of $ 88 per share.

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