BofA update shows where active managers are putting money
Investing.com - DA Davidson has reiterated its Buy rating on Best Buy (NYSE:BBY) with a price target of $90.00, following the retailer’s latest quarterly results. This target aligns with InvestingPro’s Fair Value analysis, which suggests the stock is currently undervalued. The company has maintained its position as a prominent player in specialty retail, with a robust dividend history spanning 23 consecutive years.
The firm noted that Best Buy reported its best comparable sales growth since the third quarter of 2021, with strong momentum continuing throughout the quarter and into the third quarter of fiscal 2025.
Best Buy’s performance led to a profit that exceeded expectations, along with solid guidance for the third quarter and a reiteration of the company’s full-year outlook, with most key metrics meeting or exceeding consensus estimates.
According to DA Davidson, Best Buy’s comparable sales growth has been driven primarily by the computing product cycle and gaming, while the impact of tariffs has been less significant than initially anticipated.
The firm acknowledged that the quarter wasn’t flawless, as Best Buy’s gross margin missed expectations by 10 basis points, and the company’s projected third-quarter operating margin of 3.7% falls slightly below the consensus estimate of 3.8%.
In other recent news, Best Buy has reported a strong second-quarter performance, surpassing expectations in revenue and earnings. The electronics retailer experienced a 1.6% increase in comparable sales, marking its best performance in fourteen quarters, largely driven by Nintendo Switch 2 and laptop sales. This positive momentum has led to several analyst firms adjusting their price targets for Best Buy. Truist Securities raised its target to $72, while maintaining a Hold rating, and Evercore ISI increased its target to $77, keeping an "In Line" rating. Goldman Sachs also raised its price target to $95, maintaining a Buy rating, noting strong sales despite a slight miss on gross margin. Piper Sandler maintained a Neutral rating with a $75 price target, highlighting the company’s strong Q2 comparable sales growth. Best Buy’s management has guided third-quarter sales 150 basis points above consensus estimates, indicating continued sales momentum. Analysts from KeyBanc Capital Markets observed that this growth aligns with trends in their proprietary data, maintaining a Sector Weight rating.
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