Radio Shack To Carry iPhone; Analysts Enthused; Stock Jumps

Radio Shack (RSH) disclosed in an 8-K filing with the SEC Friday that the company will launch sales of the Apple (AAPL) iPhone 3G and 3Gs in a limited number of stores in the Dallas-Fort Worth and New York areas starting later this month. The retailer said it will introduce the iPhone in stores nationwide in 2010.

The news has triggered a flurry of enthusiastic research notes from the Street on the improved prospects for the Shack:

• Credit Suisse analyst Gary Balter this morning raised his rating on RSH to Outperform from Neutral, with a new price target of $25, up from $15. He says the Apple news is a “game changer,” which combined with other recent initiatives, easy near-term earnings comparisons and a low valuation point to potential multiple expansion in 2010.


• Goldman Sachs analyst Matthew Fassler repeated his Neutral rating on the shares, but upped his target to $21, from $19, and raised his 2010 EPS estimate by 7 cents to $1.65, while boosting his 2011 view by 14 cents to $1.74.


• Morgan Stanley analyst Gregory Melich cited RSH as a “tactical” buy idea, asserting that the stock is likely to rise relative to the rest of the retailing industry over the next 45 days; he writes that adding the iPhone underscores the retailer’s “growing relevancy as a wireless destination.”


• Barclays Capital analyst Michael Lasser repeated his Equal Weight rating, and upped his target price to $20, from $19. He likewise said that in addition to financial benefits, the deal “reflects RSH’s improving relevancy in the marketplace.”

RSH today is up $1.91, or 10.8%, to $19.65.