) -- Discounters and wholesale clubs are weighing on

Best Buy

TST Recommends

(BBY) - Get Report

as shoppers look for deals on electronics.

As a result, the retailer was downgraded to neutral by Goldman Sachs and removed from its list of preferred stocks, sending shares down 4% to $38.03 in morning trading.

While the company is expected to gain market share from the elimination of Circuit City, analyst Matthew J. Fasslet cut the company to neutral from buy. Fassler said competition will be extremely tight from retailers like

(AMZN) - Get Report


Wal-Mart Stores

(WMT) - Get Report


Fassler's target is now $43 from $41.

In June, the company announced the appointment of its

new CEO Brian Dunn

, who plans to compete with these online and discount retailers by growing local market share

-- Reported by Jeanine Poggi in New York.

Copyright 2009 Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.