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Investing.com - Piper Sandler downgraded Best Buy (NYSE:BBY) from Overweight to Neutral on Monday, while reducing its price target to $75.00 from $82.00. The stock currently trades at $71.79, with InvestingPro data showing 17 analysts have recently revised their earnings estimates downward.
The research firm cited a lack of meaningful catalysts in the coming quarters that could accelerate comparable sales or earnings per share growth for the electronics retailer.
Piper Sandler expressed longer-term competitive concerns specifically around Best Buy’s appliance category, which represents approximately 12% of sales, and its TV category, which accounts for 15%-20% of sales.
The firm reduced its multiple assumption from 12x to 11.5x based on lower growth expectations, with the new $75 price target equating to 11.5x FY27 estimated earnings per share.
The $75 target also represents approximately 6x Piper Sandler’s FY27 estimated EBITDA for Best Buy, reflecting the firm’s more cautious outlook on the retailer’s future performance.
In other recent news, Best Buy Co., Inc. has announced a change in its executive team with the departure of Damien Harmon, Senior Executive Vice President of Channel & Customer Experiences & Enterprise Services. Harmon will leave his position to pursue other interests, and his responsibilities will be distributed among the CEO and other executives. Additionally, Neal Sample has been appointed as the new chief digital and technology officer, replacing Brian Tilzer, who played a significant role in enhancing the company’s digital capabilities since 2018.
On the financial front, UBS analyst Michael Lasser adjusted Best Buy’s price target to $90, maintaining a Buy rating. Lasser noted that the company’s first-quarter results might have been less optimistic than expected, with comparable sales below buy-side expectations. Piper Sandler analyst Peter Keith also revised the stock’s price target to $82, maintaining an Overweight rating. Keith observed that despite some challenges, Best Buy is managing tariff impacts effectively and has upcoming initiatives like the launch of Market and BBY Ads.
Both analysts highlighted the modest reduction in Best Buy’s full-year guidance, with Keith emphasizing the potential impact of tariffs on consumer demand. Despite these challenges, the company is expected to maintain its operating margin rate and introduce new product innovations later in the year.
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