As Blockbuster (BBI) carries out its plan to shut down more than 500 stores this year, NCR (NCR) has begun stepping into the breach, expanding its line of Blockbuster Express-branded DVD kiosks. J.P. Morgan analyst Paul Coster asserted in a research note this morning that NCR is opening as many as four kiosks in each vacated market.
Coster says the Blockbuster Express brand – which NCR licenses from Blockbuster – would likely operate unimpeded in the event the retailer filed Chapter 11 and shut down. He contends royalties from the kiosk chain would go into an escrow account and he used to pay creditors. “NCR would lose access to Blockbuster’s marketing, merchandising and inventory management” if the company shut down, but he says that NCR “has already gone through a learning curve that would make a transition to in-house operations virtually seamless.”
Meanwhile, Coster says that NCR’s core business “is stabilizing.” He maintains his Overweight rating on the stock, and today lifted his price target to $18, from $16.
NCR today is unchanged at $15.
No comments:
Post a Comment