Shame on you, Stacey Widlitz.

The Pali Capital analyst downgraded shares of Best Buy (NYSE:BBY) to "sell" yesterday. She set out a $32 price target on the consumer electronics retailer, well below its $38.10 closing price on Tuesday. If she's wrong, it wouldn't be the first time.

"With high expectations for the quarter going into the earnings release, we would look for a pull back in the share price to the high $20's," she told clients last month, heading into the company's holiday quarter report.

That never happened; instead, the stock jumped 13% after posting better-than-expected results the next day. Shares haven't traded below $36 since.

Doesn't this seem like the worst time to be picking on Best Buy?

  • Circuit City closed for good last month, despite ringing up $11.1 billion domestically in fiscal 2008. Won't Best Buy get a good chunk of that?
  • March has been disappointing for retailers, but isn't some of that related to the Easter holiday, which took place in March 2008 but was bumped to April this year?
  • Paychecks should be a little beefier this month as a result of the "Making Work Pay" federal tax credit. Couldn't that be enough to inspire consumers to finally upgrade their computers, portable media players, and televisions?

Widlitz points out that Wal-Mart (NYSE:WMT) suffered a March dip in consumer electronics sales. Maybe it's just me, but I see conventional consumer electronics chains like Best Buy, Conns (NASDAQ:CONN), or hhgregg (NYSE:HGG) -- or even the mighty Amazon.com (NASDAQ:AMZN) -- as the more likely draws for Circuit City's displaced clientele.

After all, hhgregg announced a $50 discount on purchases of $299 or more in exchange for Circuit City gift cards or credit cards. Meanwhile, Wal-Mart's too busy stocking groceries to appeal to Joe Consumer, who wants a little guidance about which satellite radio receiver to buy, which video game console to pick up for the grandchildren, or whether a cheaper netbook will satisfy his modest computing needs.

So even if I concede that Widlitz is right about March, the same fiscal quarter also includes what should be a potent April for Best Buy. At this point, downgrading the company looks like little more than Widlitz doubling down after a bad bet last month.

Best Buy and Wal-Mart are Motley Fool Inside Value recommendations. Amazon.com and Best Buy are Motley Fool Stock Advisor selections. The Fool owns shares of Best Buy. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz came out of last month's liquidation sale at Circuit City empty-handed. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.