Truist maintains Best Buy stock hold rating, $64 target

On Thursday, Truist Securities maintained its Hold rating on Best Buy shares (NYSE: BBY), with a consistent price target of $64.00. According to InvestingPro data, the company, a prominent player in the Specialty Retail industry, currently trades at $71.52, with analyst targets ranging from $64 to $110. The firm’s analysis followed Best Buy’s first-quarter results, which matched Truist’s expectations, including a slight Domestic comparable sales decline of (0.7%) against their anticipated flat performance. Earnings per share (EPS) were reported at $1.15, aligning precisely with Truist’s forecast.

The company’s recent performance and updated outlook indicate a steady continuation of core business trends, according to Truist Securities. While there have been modest increases in certain categories such as laptops and mobile phones, these have been largely counterbalanced by declines in other areas. InvestingPro analysis shows the company maintains strong financial health with a moderate debt level and sufficient cash flows to cover interest payments. Seven analysts have recently revised their earnings estimates upward for the upcoming period. Truist noted that management’s efforts to factor in the potential impact of tariffs have resulted in projections that appear more favorable than both the company’s prior estimates and Truist’s own predictions.

Despite these observations, the analyst at Truist Securities pointed out that Best Buy’s stock continues to offer a dividend yield of approximately 5%. InvestingPro data confirms a current dividend yield of 5.31%, supported by 23 consecutive years of dividend maintenance and 7 years of consecutive increases. The lack of evident sustainable upward earnings momentum is likely to keep Best Buy’s shares in a state of uncertainty for the foreseeable future, though InvestingPro analysis suggests the stock may be undervalued at current levels.

The assessment from Truist Securities came after a thorough review of Best Buy’s first-quarter financials and before additional insights expected from the company’s conference call later on Thursday. The firm’s stance on Best Buy’s stock remains cautious, highlighting the balance between certain positive aspects, such as the dividend yield and less impactful tariff effects, against the backdrop of limited earnings growth potential.

In other recent news, Best Buy Co Inc (NYSE:BBY) reported its Q1 2025 earnings, surpassing analyst expectations with an earnings per share (EPS) of $1.15 compared to the forecasted $1.07. The company also reported revenue of $8.8 billion, slightly above the projected $8.75 billion. Despite these positive earnings results, domestic comparable sales saw a decline of 0.7%, and the stock experienced a 3.1% drop in premarket trading. Analyst firms such as Truist and D.A. Davidson have been closely monitoring Best Buy’s performance, noting the company’s strategic pricing and promotional decisions amidst a challenging retail environment.

Best Buy’s CEO, Corie Barry, highlighted growth in computing and mobile phone sales, marking the first positive comparable sales in mobile phones in three years. The company also maintained its adjusted operating income rate at 3.8%, consistent with the previous year. Additionally, Best Buy is actively working on tariff mitigation strategies with vendors to manage supply chain costs effectively.

Looking ahead, Best Buy has provided full-year comparable sales guidance, projecting a range from a 1% decline to a 1% increase, and anticipates an adjusted operating income rate of approximately 4.2%. The company remains focused on strategic initiatives in digital experiences and marketplace expansions, with plans to launch a mid-year marketplace. Analysts will continue to watch how these developments impact Best Buy’s financial performance and market position.

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