KeyBanc maintains Best Buy stock at Sector Weight

On Friday, KeyBanc Capital Markets continued to hold a "Sector Weight" rating on Best Buy shares (NYSE:BBY), acknowledging the company’s resilience in demand despite ongoing uncertainty within the consumer electronics industry. Bradley Thomas, an analyst at KeyBanc, noted that Best Buy’s comparable store sales (comps) dropped slightly by 0.7%, with robust performance in computing and tablets, which saw a 6% increase, and mobile phones. This strength was, however, offset by weaker sales in home theater and appliances. The company’s overall revenue declined 3.23% over the last twelve months to $41.45 billion, while maintaining a healthy gross profit margin of 22.61%. According to InvestingPro data, Best Buy’s stock currently trades at $66.32, significantly below its 52-week high of $103.71.

Best Buy anticipates a slight decline in comps for the second quarter, consistent with the first quarter guidance, suggesting negative comps in the first half of 2025. The company’s management has revised its 2025 guidance to account for the effects of tariffs, now expecting earnings per share (EPS) to be between $6.15 and $6.30 with comp sales ranging from -1% to +1%. Despite these challenges, InvestingPro analysis shows Best Buy maintains strong shareholder returns with a significant 5.73% dividend yield, having maintained dividend payments for 23 consecutive years. The company’s financial health score is rated as "FAIR" with particularly strong profitability metrics.

Despite the adjustments in guidance, which now factor in tariff impacts, and management’s efforts to navigate the challenging environment, KeyBanc’s Thomas expressed concerns regarding the potential risks to comps in the second half of 2025. The analyst pointed to tougher comparisons and uncertainties around demand destruction that could arise due to price increases.

KeyBanc’s reiteration of the Sector Weight rating reflects a neutral stance on Best Buy’s stock, suggesting that the firm sees the company’s shares as fairly valued given the current information. The rating indicates that KeyBanc analysts believe Best Buy’s stock performance will be in line with the average returns of the companies in the sector over the next 12 months.

In other recent news, Best Buy Co. Inc. has been the subject of several analyst updates following its recent earnings report. The company reported mixed results, with a revenue miss but an earnings per share (EPS) beat due to a favorable tax settlement. Analysts from Wedbush, Goldman Sachs, DA Davidson, Jefferies, and JPMorgan have all revised their price targets for Best Buy, reflecting ongoing concerns about tariffs and consumer spending habits. Wedbush lowered its target to $70 while maintaining a neutral stance, citing risks related to consumer spending and trade uncertainties.

Goldman Sachs reduced its target to $94, retaining a Buy rating and expressing optimism about Best Buy’s ability to manage tariffs and innovate. DA Davidson set a new target of $90, also with a Buy rating, highlighting improvements in tariff management and potential product cycle benefits. Jefferies cut its target to $88 but kept a Buy rating, noting confidence in management’s strategy and projected double-digit EPS growth in the coming years. JPMorgan adjusted its target to $95, maintaining an Overweight rating and pointing to an appealing valuation and potential growth drivers in computing and gaming.

Despite the varied targets, analysts generally maintain a positive outlook on Best Buy’s long-term potential, emphasizing the company’s strategies to manage tariff impacts and explore alternative revenue streams.

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