Barnes & Noble Cut to a “Sell” at Goldman Sachs (BKS)

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Bookseller Barnes & Noble, Inc. ( BKS ) on Tuesday saw its rating and price target slashed by analysts at Goldman Sachs.

The firm downgraded BKS to "Sell" from "Neutral," noting several challenges ahead for the company, as well as a muted possibility for a takeover. Goldman also lowered its price target for the stock from $15 to $13, which represents an expected 18% downside to the stock's Monday closing price of $15.87.

Goldman noted that "following management's recent proxy victory we believe a transaction is less likely."

Barnes & Noble shares fell 27 cents, or -1.7%, in premarket trading Tuesday.

The Bottom Line
We have been avoiding shares of BKS since our early June 2008 coverage began, when the stock was trading at $27.31. The company has an unsustainable 6.30% dividend yield, based on last night's closing stock price of $15.87. The stock has technical support in the $12-$14 price area. If the shares can firm up, we see overhead resistance around the $17-$18 price levels. We would remain on the sidelines for now.

Barnes & Noble, Inc. ( BKS ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.1 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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