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Headquartered in Richfield, Minnesota, Best Buy Co., Inc. (BBY) is a leading retailer specializing in consumer electronics, appliances, and technology products. With a market cap of $18.6 billion, Best Buy operates a vast network of retail stores and an e-commerce platform, providing customers with a wide range of products and services, including home entertainment, computing, and smart home solutions.
Shares of this tech retail giant have underperformed the broader market over the past year. The stock gained 27.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 31.1%. In 2024, BBY stock is up 10.5%, while SPX is up 24.7% on a YTD basis.
However, zooming in further, BBY stock has slightly outperformed the SPDR S&P Retail ETF (XRT) 24.4% return over the past 52 weeks and 9.1% YTD gains.
Best Buy has faced market underperformance due to concerns about weakening consumer demand for discretionary electronics and heightened retail competition.
However, following its Q2 earnings release on Aug. 29, the stock gained 14.1% as the company delivered an adjusted EPS of $1.34, surpassing the consensus estimate of $1.16. Revenue declined 3.1% year-over-year to $9.3 billion, reflecting ongoing challenges in the sector. Best Buy raised its full-year adjusted EPS guidance to a range of $6.10 to $6.35 and projected revenue between $41.3 billion and $41.9 billion.
For the current fiscal year, ending in January 2025, analysts expect Best Buy’s EPS to decline 1.4% to $6.28 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 23 analysts covering BBY stock, the consensus is a “Moderate Buy.” That’s based on 11 “Strong Buy” ratings, 11 “Holds,” and one “Moderate Sell.”
This configuration is more bullish than three months ago when ten analysts suggested a "Strong Buy."
On Nov. 21, Joe Feldman from Telsey Advisory maintained a “Buy” rating on Best Buy, with a price target of $115, implying a potential upside of 32.9% from current levels.
The mean price target of $104.20 represents a 20.4% premium to BBY’s current price levels. The Street-high price target of $123 suggests an ambitious upside potential of 42.2%.
