UBS Group Downgrades Best Buy (NYSE:BBY) to Hold

Key Points

• UBS Group downgraded Best Buy from “strong-buy” to “hold,” even as the broader analyst community remains mixed-to-cautiously positive on the retailer.
• Best Buy’s latest quarter beat expectations, with EPS of $1.28 versus $1.22 estimated and revenue of $8.94 billion topping forecasts; comparable sales also rose 2.0%.
• Despite the downgrade, several firms raised price targets after earnings, and Best Buy reaffirmed its full-year guidance, citing improving margins and stronger demand in categories like gaming, computing, and cellphones.

Best Buy (NYSE:BBY - Get Free Report) was downgraded by equities researchers at UBS Group from a "strong-buy" rating to a "hold" rating in a research report issued to clients and investors on Friday,Zacks.com reports.

Other equities research analysts also recently issued reports about the company. BNP Paribas Exane lifted their price objective on Best Buy from $74.00 to $76.00 and gave the stock a "neutral" rating in a report on Friday. Jefferies Financial Group lifted their price objective on Best Buy from $83.00 to $89.00 and gave the stock a "buy" rating in a report on Thursday. Guggenheim restated a "buy" rating and set a $90.00 price objective on shares of Best Buy in a report on Friday. Citigroup lifted their price objective on Best Buy from $60.00 to $79.00 and gave the stock a "neutral" rating in a report on Friday. Finally, Evercore lifted their price objective on Best Buy from $65.00 to $85.00 in a report on Friday. Six research analysts have rated the stock with a Buy rating, fourteen have given a Hold rating and two have assigned a Sell rating to the company. According to MarketBeat, Best Buy presently has an average rating of "Hold" and an average price target of $78.60.

Best Buy Stock Performance

Shares of NYSE:BBY opened at $78.16 on Friday. The company has a market cap of $16.47 billion, a P/E ratio of 14.47, a PEG ratio of 1.85 and a beta of 1.22. The company has a debt-to-equity ratio of 0.38, a quick ratio of 0.43 and a current ratio of 1.12. Best Buy has a one year low of $55.10 and a one year high of $84.99. The business's 50-day simple moving average is $62.29 and its 200 day simple moving average is $66.88.

Best Buy (NYSE:BBY - Get Free Report) last posted its quarterly earnings data on Thursday, May 28th. The technology retailer reported $1.28 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.22 by $0.06. Best Buy had a return on equity of 48.70% and a net margin of 2.73%.The company had revenue of $8.94 billion for the quarter, compared to the consensus estimate of $8.82 billion. During the same period in the previous year, the business earned $1.15 EPS. Best Buy's revenue for the quarter was up 1.9% compared to the same quarter last year. Best Buy has set its FY 2027 guidance at 6.300-6.600 EPS. On average, sell-side analysts forecast that Best Buy will post 6.5 earnings per share for the current fiscal year.

Insider Buying and Selling

In other news, EVP Jason J. Bonfig sold 6,336 shares of Best Buy stock in a transaction that occurred on Monday, March 23rd. The stock was sold at an average price of $64.02, for a total value of $405,630.72. Following the completion of the transaction, the executive vice president owned 79,137 shares in the company, valued at approximately $5,066,350.74. This trade represents a 7.41% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, insider Todd G. Hartman sold 5,339 shares of Best Buy stock in a transaction that occurred on Monday, March 23rd. The stock was sold at an average price of $64.02, for a total value of $341,802.78. Following the completion of the transaction, the insider owned 44,098 shares of the company's stock, valued at approximately $2,823,153.96. The trade was a 10.80% decrease in their position. The SEC filing for this sale provides additional information. In the last quarter, insiders have sold 77,247 shares of company stock worth $4,945,353. 0.47% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Several hedge funds have recently made changes to their positions in BBY. Woodline Partners LP grew its position in shares of Best Buy by 40.1% in the 1st quarter. Woodline Partners LP now owns 16,436 shares of the technology retailer's stock worth $1,210,000 after acquiring an additional 4,701 shares in the last quarter. Daiwa Securities Group Inc. boosted its position in Best Buy by 4.4% during the 2nd quarter. Daiwa Securities Group Inc. now owns 29,560 shares of the technology retailer's stock valued at $1,984,000 after purchasing an additional 1,234 shares during the period. Investment Management Corp of Ontario boosted its position in Best Buy by 127.7% during the 2nd quarter. Investment Management Corp of Ontario now owns 12,997 shares of the technology retailer's stock valued at $872,000 after purchasing an additional 7,288 shares during the period. Ieq Capital LLC boosted its position in Best Buy by 155.4% during the 2nd quarter. Ieq Capital LLC now owns 160,568 shares of the technology retailer's stock valued at $10,779,000 after purchasing an additional 97,688 shares during the period. Finally, Alliancebernstein L.P. boosted its position in Best Buy by 32.0% during the 2nd quarter. Alliancebernstein L.P. now owns 313,584 shares of the technology retailer's stock valued at $21,051,000 after purchasing an additional 76,102 shares during the period. Institutional investors and hedge funds own 80.96% of the company's stock.

Key Best Buy News

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

• Positive Sentiment: Best Buy reported Q1 adjusted EPS of $1.28, above estimates of $1.22, and revenue of $8.94 billion, also ahead of forecasts, with comparable sales rising 2.0%. Best Buy Q1 Earnings Beat Estimates, Comparable Sales Rise 2%
• Positive Sentiment: The company reaffirmed its full-year guidance and highlighted improving margins and stronger demand in gaming, computing, and cellphones, suggesting the turnaround is gaining traction. Best Buy Reports First Quarter Results
• Positive Sentiment: Several analyst firms raised price targets after the earnings release, including Jefferies, Loop Capital, Guggenheim, Morgan Stanley, Citigroup, and others, indicating improving sentiment around the stock. Analyst rating updates
• Positive Sentiment: Retail-industry news also pointed to selective consumer spending still favoring value-focused names like Best Buy, adding to the rally. Retail Rally Sends Kohl's, Best Buy, Dollar Tree Up As Much As 18%
• Neutral Sentiment: DA Davidson reaffirmed its buy rating but set a $78 price target, which is roughly in line with the current share price and does not materially change the valuation debate. DA Davidson rating reaffirmation
• Neutral Sentiment: Best Buy also announced a quarterly dividend of $0.96 per share, reinforcing its income appeal for investors. Dividend announcement

Best Buy Company Profile

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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