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Richfield, Minnesota-based Best Buy Co., Inc. (BBY) is a multinational specialty retailer of consumer electronics, home office products, entertainment software, communication, food preparation, wellness, health, and security appliances. The company provides delivery, installation, memberships, repair, set-up, technical support, health-related, and warranty-related services as well and is valued at a market cap of $18.8 billion.
This consumer electronics retailer’s shares have underperformed the broader market over the past 52 weeks. BBY has gained 14.3% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 20.5%. Moreover, the stock is up 1.2% on a YTD basis, compared to SPX’s 2.9% rise during the same time frame.
Zooming in further, BBY has underperformed the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 24.5% return over the past 52 weeks but has outpaced XLY’s marginal decrease on a YTD basis.
On Feb. 3, BBY’s shares fell 2.4% amid concerns over President Trump’s proposed tariffs. Investors feared the tariffs could drive up prices on groceries, electronics, and other household expenses, adding upward pressure on the U.S. inflation rate.
On Nov. 26, shares of BBY dropped 4.9% after the company reported weaker-than-expected Q3 results. Adjusted EPS came in at $1.26 per share, while revenue totaled $9.5 billion, with both figures missing estimates and declining year-over-year by 2.3% and 3.2%, respectively. Additionally, comparable sales fell 2.9% from the prior year.
Adding to the downtick, the company lowered its fiscal 2025 revenue guidance between $41.1-$41.5 billion and envisions comparable sales to decline in the band of 2.5-3.5%.
For the fiscal year, which ended in January 2025, analysts expect Best Buy’s EPS to decline 3% year over year to $6.18. The company’s earnings surprise history is mixed. It beat the Wall Street estimates in three of the last four quarters while missing on another occasion.
Among the 23 analysts covering the stock, the consensus rating is a “Moderate Buy,” which is based on 11 “Strong Buy,” 11 “Hold,” and one “Moderate Sell” rating.
On Nov. 23, JPMorgan analyst Christopher Horvers maintained an “Overweight” rating on BBY and raised its price target to $117- the Street-high price target, which indicates a 34.8% potential upside from the current levels.
The mean price target of $99.45 represents a 14.6% upside from Best Buy’s current price levels.
