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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 $16 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. BBY is a market leader in consumer electronics, with a strong presence in North America. Its brand strength is highlighted by a loyal customer base and significant market share. Investments in e-commerce and customer service have further solidified its position. The company's reputation for quality and service drives its strong financial performance.
Despite its notable strength, BBY slipped 28% from its 52-week high of $103.71, achieved on Aug. 29, 2024. Over the past three months, BBY stock has declined 14.1%, underperforming the Nasdaq Composite’s ($NASX) 8.8% dip during the same time frame.
In the longer term, shares of BBY fell 13% on a YTD basis and dipped 7.6% over the past 52 weeks, underperforming NASX’s YTD losses of 5.4% and 11.5% returns over the last year.
To confirm the bearish trend, BBY has been trading below its 200-day moving average since early March. The stock is trading below its 50-day moving average since late October, 2024, with some fluctuations.
Best Buy is currently navigating challenges related to tariffs and the possibility of having to raise prices due to the ongoing trade war with China and Mexico. The company is unsure of how willing consumers will be to pay higher prices for their discretionary purchases. Although guidance predicted minimal changes in consumer behavior as a result of inflation, it was still seen as a weak quarter overall for the company.
On Mar. 4, BBY shares closed down more than 13% after reporting its Q4 results. Its adjusted EPS of $2.58 topped Wall Street expectations of $2.40. The company’s revenue was $14 billion, topping Wall Street forecasts of $13.7 billion. BBY expects full-year adjusted EPS in the range of $6.20 to $6.60, and expects revenue to be between $41.4 billion and $42.2 billion.
In the competitive arena of specialty retail, GameStop Corp. (GME) has taken the lead over BBY, showing resilience with 68% gains over the past 52 weeks. However, GME shares lagged behind the stock with a 19% downtick on a YTD basis.
Wall Street analysts are moderately bullish on BBY’s prospects. The stock has a consensus “Moderate Buy” rating from the 23 analysts covering it, and the mean price target of $90.65 suggests a potential upside of 21.5% from current price levels.
