DVDs: A Real Blockbuster2/17/2002 7:00 PM Eastern
Salomon Smith Barney Inc. analyst Margaret Blaydes maintained her "neutral" rating on Blockbuster Inc. after the video retailer reported better-than-expected earnings. Much of the stock's upside has already been factored into its current price, she wrote in a report. Blockbuster reported earnings of 35 cents per share on Feb. 12, beating Blaydes' estimate of 28 cents, largely on increased sales of higher-margin DVDs and video games. While Blockbuster is effectively shifting from VHS to DVD and video-game sales and rentals, Blaydes wrote in her report, "some of this progress is reflected in the current price." She also maintained her $26 price target on the stock. Blockbuster closed at $20.78 on Feb. 13, down 23 cents.