SWS Cuts Blockbuster to 'Market Outperform'
SWS Securities downgraded Blockbuster (BBI ) to market outperform from strong buy.
Analyst Harry Katica says the company has experienced a significant slowing of movie rentals since Thanksgiving, as consumers are attracted to the discounted prices offered by mass merchants on new DVD titles. He cut his $1.32 2002 earnings per share estimate to $1.05, and cut the $1.51 2003 estimate to $1.25.
While he believes the exaggerated trade-off from rental to purchases is a temporary phenomenon, Katica says it will take several quarters to see how the trend develop