) to buy from neutral.
Analyst Gary Balter says the combination of a winning formula at Babies R Us, some excess real estate, potential store closings, and ongoing domestic and international value at Toys R Us stores could be worth more than the Street's expectations. He anticipates some type of restructure; he would focus on shuttering a significant percentage of underperforming U.S. toy stores, and ramp up the Babies R Us stores.
Although a restructure has risks, he says the downside is limited. Balter believes the shares are worth $22 (the mid-point of the $17 to $27 range).