Best Buy Ready to Feast at Digital TV Sweet Spot

McGranahan (who doesn't own Best Buy and whose firm has no banking relationship with the company) noted that DTVs lend themselves particularly well to Best Buy's sales model, since customers typically want to speak to a salesperson about making that sort of investment amid the dizzying array of choices.

"At Wal-Mart, you can toss a DVD player into your cart after comparing prices without a second thought, but buying a television, particularly a very large one, is a different matter," he said.

At close to 15 times next year's estimated earnings, the stock seems well priced next to its most comparable competitor, Circuit City, which is currently trading at over 20 times 2005 estimates.

"We think that the rate at which people will start buying these televisions is probably not priced into this stock at this point," Erickson said.

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