MobileRead Forums - View Single Post - Goldman Sachs gives Barnes and Noble new $14 price target

Danskeron · 04-16-2012, 11:21 AM

In light of the DOJ activity last week, which in my eyes could give Amazon the opportunity to go even lower in the e-book pricing war with it's competitors, I was interested in anyone's opinion on Goldman Sachs lowered forecast for Barnes and Noble. In the research note released with their lowered $14 price target (from $15),

The analysts wrote, “We see risk to BKS from two sources: (1) Lower book prices could reduce gross margin in the ebook business, impeding an already precarious model (EBITDA losses through our forecast horizon). (2) Hastening the migration of book sales online, and away from the physical channel which, despite its secular challenges, is generating all of the firm’s free cash flow, and, in our view, most of its value.”

Coupled with their decline in online physical book sales, how does Barnes and Noble navigate the rest of 2012?

04-16-2012, 11:21 AM	#1
Danskeron Junior Member Posts: 7 Karma: 10 Join Date: Apr 2012 Device: nook	Goldman Sachs gives Barnes and Noble new $14 price target In light of the DOJ activity last week, which in my eyes could give Amazon the opportunity to go even lower in the e-book pricing war with it's competitors, I was interested in anyone's opinion on Goldman Sachs lowered forecast for Barnes and Noble. In the research note released with their lowered $14 price target (from $15), The analysts wrote, “We see risk to BKS from two sources: (1) Lower book prices could reduce gross margin in the ebook business, impeding an already precarious model (EBITDA losses through our forecast horizon). (2) Hastening the migration of book sales online, and away from the physical channel which, despite its secular challenges, is generating all of the firm’s free cash flow, and, in our view, most of its value.” Coupled with their decline in online physical book sales, how does Barnes and Noble navigate the rest of 2012?