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Best Buy Co., Inc. (BBY), headquartered in Richfield, Minnesota, retails consumer electronics, home office products, entertainment software, appliances, and related services through its retail stores, as well as its website. Valued at $21.1 billion by market cap, the company also retails pre-recorded home entertainment products through retail stores.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and BBY perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the specialty retail industry. Best Buy's market dominance in North American consumer electronics is rooted in its iconic brand, steadfast customer loyalty, and expansive product portfolio. With over 33% market share in offline sales, the company has cemented its status as the premier destination for electronics.
Despite its notable strength, BBY slipped 5.6% from its 52-week high of $103.71, achieved on Aug. 29. Over the past three months, BBY stock has gained 8.3%, outperforming the SPDR S&P Retail ETF (XRT) 1% gains during the same time frame.
In the longer term, shares of BBY rose 25% on a YTD basis and climbed 41.3% over the past 52 weeks, outperforming XRT’s YTD gains of 5.8% and solid 28.4% returns over the last year.
To confirm the bullish trend, BBY has been trading above its 50-day moving average since mid-August. It is trading above its 200-day moving average since May end.
Best Buy's strong performance is driven by management's optimism about industry stabilization, which is expected to continue for the remainder of the fiscal year.
On Aug. 29, BBY shares closed up more than 14% after reporting its Q2 earnings results. Its adjusted EPS of $1.34 was better than the consensus of $1.16. BBY’s revenue declined 3.1% year over year to $9.3 billion. The company raised its full-year adjusted EPS forecast to $6.10 to $6.35 and expects its revenue to be between $41.3 billion and $41.9 billion.
In the competitive arena of specialty retail, Williams-Sonoma, Inc. (WSM) has taken the lead over BBY, showing resilience with a 52.1% uptick on a YTD basis AND 119.2% over the past year.
Wall Street analysts are moderately bullish on BBY’s prospects. The stock has a consensus “Moderate Buy” rating from the 21 analysts covering it, and the mean price target of $105.05 suggests a potential upside of 7.3% from current price levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
