While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Best Buy (NYSE:BBY) slumped another 4% this morning after Goldman Sachs downgraded the electronics retail giant from buy to neutral.

So what: Along with the downgrade, analyst Matthew Fassler lowered his price target to $28 (from $45), representing just 4% worth of upside to yesterday's close. While contrarians might be attracted to yesterday's big 30% tumble, Fassler thinks Best Buy's appreciation prospects remain limited given the strong headwinds still working against it.

Now what: Goldman expects Best Buy to trade in line with secularly challenged retailers once again, after having soared in 2013. "The likely diminished contribution of highly profitable wireless growth and the cycling of Vizio as a key driver of TV share gains impair our confidence as we look forward," noted Fassler. "Management spoke to incremental cost cutting opportunities on its call, but we think the firm will be challenged to deliver superior customer experiences while slashing its cost structure."

Given Best Buy's still-worrisome sales trends and increasingly clear cost disadvantages, it's tough to disagree with Goldman's downgrade.

Your best buy for 2014
There’s a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it’s one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Goldman Sachs. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Compare Brokers