Best Buy's shares were trading down more than 3.5 percent on Tuesday afternoon to $23.21 after an analyst reportedly cut his firm's rating of the Richfield-based electronics retailer's stock.

Peter Keith, an analyst at Minneapolis-based Piper Jaffray, assumed coverage of the stock and cut his firm's rating of Best Buy to “neutral” from “overweight,” according to a report by Forbes.

The analyst announced a new price target for the stock of $26, down from $39, Forbes reported. The stock closed on Friday at $24.10.

In a research note, Keith reportedly wrote the following: “While valuation is intriguing at current levels, we believe [Best Buy]'s earnings multiple will remain depressed given its unfavorable positioning in the current consumer electronics industry product cycles and its declining [return on invested capital] trend. Returning cash to shareholders and international growth are two positives of note, but we would not expect [Best Buy] shares to be rewarded on these initiatives until the company can demonstrate sustainable operating margin expansion.”

For the quarter that ended on May 28, Best Buy reported net income of $136 million on revenue of $10.9 billion-representing a 12 percent drop and a 1 percent gain, respectively. Same-store sales, meanwhile, slid 1.7 percent compared to the same period a year ago.

To learn more about Piper Jaffray's downgrade of Best Buy's shares, read the full Forbes story here.