A prominent analyst has spoken out against the earnings estimate for 2011 from Redbox parent Coinstar, sending the latter’s shares tumbling. JP Morgan analyst Paul Coster dropped his rating on Coinstar shares from “neutral” to “underperform”.
According to Coster, Redbox will continue to struggle with inventory issues and difficulties related to the 28-day delays it deals with from several studios. These factors will contribute to Coinstar shares underperforming this year, says Coster:
“We believe [Coinstar] is facing the near-term headwind of a weak slate of movies for rental compounded by the relative staleness rendered by the 28-day window,”
What do you make of Coster’s comments, Insiders? Did Coinstar deserve to have its rating dropped, or is this analyst being unnecessarily pessimistic?
(via Home Media Magazine)