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Citigroup upgraded Blockbuster (BBI
) to buy from hold, explaining that rental trends are improving, investors expect less from the company, and the company seems better positioned to manage its debt burden.
Analyst Tony Wible says investors are overly discounting Blockbuster's online business and long term perpetuity value. Based on factors such as the company's cost reductions, subleasing opportunities, and improving balance sheet, Wible increased his stock price target to $5.75 from $4.50.