Legato Capital Management LLC Invests $2.05 Million in Best Buy Co., Inc. $BBY

Key Points

• Legato Capital Management opened a new position in Best Buy during the fourth quarter, buying 30,655 shares worth about $2.05 million. Other large institutional investors also increased their stakes, and institutions now own about 80.96% of the company.
• Best Buy’s latest quarter beat earnings expectations, reporting $2.61 EPS versus the $2.48 consensus, though revenue of $13.81 billion came in slightly below estimates and was down 1% year over year. The company also reaffirmed guidance, with analysts expecting about $6.50 EPS for the current year.
• The retailer raised its quarterly dividend to $0.96 per share, or an annualized yield of about 6.2%. Meanwhile, analysts remain cautious overall, with a consensus rating of Hold and a price target of $70.80.

Legato Capital Management LLC purchased a new position in Best Buy Co., Inc. (NYSE:BBY - Free Report) during the fourth quarter, according to its most recent disclosure with the Securities & Exchange Commission. The institutional investor purchased 30,655 shares of the technology retailer's stock, valued at approximately $2,052,000.

A number of other hedge funds have also modified their holdings of the stock. Vanguard Group Inc. increased its stake in shares of Best Buy by 1.3% in the fourth quarter. Vanguard Group Inc. now owns 24,255,320 shares of the technology retailer's stock worth $1,623,409,000 after acquiring an additional 307,905 shares during the last quarter. AQR Capital Management LLC increased its stake in shares of Best Buy by 99.8% in the third quarter. AQR Capital Management LLC now owns 6,997,871 shares of the technology retailer's stock worth $525,120,000 after acquiring an additional 3,496,254 shares during the last quarter. Northern Trust Corp increased its stake in shares of Best Buy by 5.5% in the third quarter. Northern Trust Corp now owns 2,888,664 shares of the technology retailer's stock worth $218,441,000 after acquiring an additional 150,871 shares during the last quarter. Bank of New York Mellon Corp increased its position in Best Buy by 2.3% during the third quarter. Bank of New York Mellon Corp now owns 1,754,844 shares of the technology retailer's stock worth $132,701,000 after buying an additional 39,026 shares during the last quarter. Finally, Legal & General Group Plc increased its position in Best Buy by 0.3% during the third quarter. Legal & General Group Plc now owns 1,661,024 shares of the technology retailer's stock worth $125,607,000 after buying an additional 5,130 shares during the last quarter. 80.96% of the stock is owned by institutional investors and hedge funds.

Best Buy Trading Up 0.6%

Shares of NYSE:BBY opened at $61.53 on Friday. The company has a market cap of $12.97 billion, a P/E ratio of 12.21, a P/E/G ratio of 1.52 and a beta of 1.22. The stock's 50-day moving average is $61.72 and its 200-day moving average is $67.28. Best Buy Co., Inc. has a 52-week low of $55.10 and a 52-week high of $84.99. The company has a debt-to-equity ratio of 0.39, a quick ratio of 0.43 and a current ratio of 1.11.

Best Buy (NYSE:BBY - Get Free Report) last issued its quarterly earnings results on Tuesday, March 3rd. The technology retailer reported $2.61 earnings per share (EPS) for the quarter, beating the consensus estimate of $2.48 by $0.13. The company had revenue of $13.81 billion for the quarter, compared to the consensus estimate of $13.96 billion. Best Buy had a return on equity of 49.17% and a net margin of 2.56%.The firm's revenue was down 1.0% compared to the same quarter last year. During the same period last year, the business posted $2.58 earnings per share. Best Buy has set its FY 2027 guidance at 6.300-6.600 EPS. Equities research analysts predict that Best Buy Co., Inc. will post 6.5 earnings per share for the current year.

Best Buy Increases Dividend

The firm also recently declared a quarterly dividend, which was paid on Tuesday, April 14th. Stockholders of record on Tuesday, March 24th were given a $0.96 dividend. This is an increase from Best Buy's previous quarterly dividend of $0.95. This represents a $3.84 annualized dividend and a dividend yield of 6.2%. The ex-dividend date of this dividend was Tuesday, March 24th. Best Buy's dividend payout ratio (DPR) is 76.19%.

Key Stories Impacting Best Buy

Here are the key news stories impacting Best Buy this week:

• Positive Sentiment: Best Buy is being viewed as likely to post solid first-quarter results, with analysts expecting in-line comparable sales and year-over-year earnings growth, which could help support the stock if the company meets those expectations. Best Buy Poised for In-Line First-Quarter Comparable Sales, Wedbush Says
• Positive Sentiment: Recent momentum has improved, with the stock outperforming over the past week even though it remains down year to date, suggesting investors may be positioning for the upcoming report. A Look At Best Buy Valuation As Earnings Expectations And Cautious Sentiment Shape The May 28 Report
• Neutral Sentiment: New back-to-school-style promotions in Canada, such as BMO’s student tech reward tied to Best Buy Canada, may help traffic, but the announcement appears more promotional than material for near-term earnings. Is Best Buy’s Student Tech Perks Masking Deeper Supply Chain And Leadership Questions?
• Negative Sentiment: Investor caution is rising because Best Buy is dealing with product shortages and an upcoming CEO transition, both of which could cloud the earnings outlook and pressure sentiment if management gives a conservative forecast. Is Best Buy’s Student Tech Perks Masking Deeper Supply Chain And Leadership Questions?
• Negative Sentiment: Several previews note that Best Buy may not have the best setup for an earnings beat, which could limit upside if results only match expectations rather than exceed them. Best Buy (BBY) Q1 Earnings Preview: What You Should Know Beyond the Headline Estimates

Insider Buying and Selling

In other news, EVP Jason J. Bonfig sold 6,336 shares of the firm's stock in a transaction dated Monday, March 23rd. The stock was sold at an average price of $64.02, for a total value of $405,630.72. Following the sale, the executive vice president directly owned 79,137 shares of the company's stock, valued at approximately $5,066,350.74. This trade represents a 7.41% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, EVP Kathleen Scarlett sold 8,049 shares of the firm's stock in a transaction dated Monday, March 23rd. The shares were sold at an average price of $64.02, for a total value of $515,296.98. Following the completion of the sale, the executive vice president directly owned 102,669 shares in the company, valued at approximately $6,572,869.38. This represents a 7.27% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold a total of 77,247 shares of company stock valued at $4,945,353 in the last quarter. Insiders own 0.47% of the company's stock.

Analyst Ratings Changes

Several equities analysts have commented on the stock. Jefferies Financial Group lowered their target price on shares of Best Buy from $94.00 to $89.00 and set a "buy" rating on the stock in a research report on Monday, February 9th. KeyCorp reissued a "sector weight" rating on shares of Best Buy in a research report on Wednesday, March 4th. Piper Sandler reissued a "buy" rating on shares of Best Buy in a research report on Wednesday, March 4th. Citigroup lowered their target price on shares of Best Buy from $69.00 to $60.00 and set a "neutral" rating on the stock in a research report on Tuesday, May 12th. Finally, Wells Fargo & Company lowered their target price on shares of Best Buy from $70.00 to $60.00 and set an "equal weight" rating on the stock in a research report on Thursday, May 14th. Nine equities research analysts have rated the stock with a Buy rating, eleven have given a Hold rating and two have issued a Sell rating to the stock. Based on data from MarketBeat, the company currently has an average rating of "Hold" and a consensus price target of $70.80.

About Best Buy

Best Buy Co, Inc is a leading North American consumer electronics retailer that sells a broad range of products including computers, mobile phones, televisions and home theater systems, major appliances, smart-home devices, gaming hardware and software, wearables and related accessories. The company operates through a mix of large-format stores, smaller specialty locations and an e-commerce platform, offering national and private-brand merchandise from major consumer-technology manufacturers as well as third-party sellers.

Beyond product retailing, Best Buy provides a suite of services aimed at installation, repair and ongoing technical support.

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