Lehman ups Circuit City (CC ) target, but maintains underweight rating.
Analyst Alan Rifkin says he's raising his $13 target to $17, but maintaining an underweight rating following news of a $17/share takeover bid received from Highfields Capital Management LP.
He says the Circuit City board hasn't yet rejected or accepted this bid, which suggests the board is taking the Highfields bid much more seriously than the Carlos Slim bid in June 2003. He notes Circuit City announced the Carlos Slim bid only after it rejected it.
Rifkin says Circuit City stock is clearly in play today, but excluding the takeover speculation, he doesn't think fundamentals justify its current price. He suggests investors interested in Circuit City switch over to Best Buy.