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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 $18.3 billion by market cap, the company also retails pre-recorded home entertainment products.
Shares of this tech retail giant have underperformed the broader market considerably over the past year. BBY has gained 7.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 28.1%. In 2024, BBY’s stock rose 8.3%, compared to the SPX’s 17.3% rise on a YTD basis.
Narrowing the focus, BBY has also lagged behind the SPDR S&P Retail ETF (XRT). The exchange-traded fund has gained about 18% over the past year. However, BBY’s gains on a YTD basis outshine the ETF’s 5.8% returns over the same time frame.
BBY’s weak price performance can be attributed to declining sales in appliances, home theater, gaming, and mobile phones, which was partially offset by increased sales in services and laptops.
However, on Jun. 18, BBY shares rose nearly 1% after the company announced that it would train its 30,000 employees to sell and repair Microsoft Corporation’s (MSFT) Copilot+ PCs, the firm’s latest AI Windows laptops.
Additionally, on May 30, BBY shares rose more than 10% after reporting its Q1 results. Its adjusted EPS of $1.20 topped Wall Street expectations of $1.07. However, the company’s revenue was $8.9 billion, falling short of Wall Street forecasts of $9 billion. BBY expects full-year adjusted EPS to be between $5.75 and $6.20 and revenue between $41.3 billion and $42.6 billion.
For the current fiscal year, ending in January 2025, analysts expect BBY’s EPS to decline 4.4% to $6.09 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 21 analysts covering BBY stock, the consensus is a “Moderate Buy.” That’s based on 10 “Strong Buy” ratings, 10 “Holds,” and one “Moderate Sell.”
This configuration is more bullish than three months ago, with eight analysts suggesting a “Strong Buy” and one recommending a “Strong Sell.”
On Aug. 19, Wells Fargo & Company (WFC) analyst Zachary Fadem maintained a “Hold” rating on BBY with a price target of $80, implying a potential downside of 5.6% from current levels.
The mean price target of $89.31 represents a 5.4% premium to BBY’s current price levels. The Street-high price target of $106 suggests an upside potential of 25.1%.
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.
