BofA update shows where active managers are putting money
Investing.com - UBS has reiterated its Buy rating and $90.00 price target on Best Buy (NYSE:BBY), citing accelerating comparable sales growth and positive trends across multiple product categories. This target aligns closely with InvestingPro’s Fair Value calculation, suggesting the stock is currently undervalued.
The investment firm highlighted that Best Buy’s second-quarter performance showed improvement beyond just gaming products, demonstrating "a broadening appetite" for other merchandise in the retailer’s assortment. The company, which generates $41.6 billion in annual revenue, maintains a strong 5.23% dividend yield and has consistently paid dividends for 23 consecutive years.
UBS noted that Best Buy’s quarterly results "should have done more to help stabilize both sentiment and forward estimates," suggesting the market reaction may have undervalued the positive developments.
The retailer has maintained its bottom-line outlook despite facing an increase in its blended tariff rate from approximately 12% to 16%, which UBS viewed as a positive indicator of operational strength.
Best Buy also provided guidance indicating continued momentum into the third quarter, further supporting UBS’s optimistic stance on the consumer electronics retailer’s near-term prospects. The company trades at a P/E ratio of 17.54, with analysts maintaining a positive consensus on its profitability outlook.
In other recent news, Best Buy reported strong second-quarter results, showcasing a 1.6% increase in comparable sales. This performance marks the company’s strongest sales growth since the third quarter of 2021, driven by robust sales of Nintendo Switch 2 and laptops. Following these results, DA Davidson reiterated its Buy rating on Best Buy, maintaining a price target of $90.00, highlighting the retailer’s continued sales momentum. Meanwhile, Truist Securities raised its price target for Best Buy to $72.00, citing the positive impact of Nintendo Switch 2 sales on the company’s second-quarter performance. Evercore ISI also adjusted its price target, increasing it to $77.00 from $75.00, while maintaining an "In Line" rating, noting the company’s potential path to earnings growth in 2026. Piper Sandler kept a Neutral rating and a $75 price target, emphasizing the significant contribution of entertainment sales to Best Buy’s domestic operations. KeyBanc Capital Markets maintained a Sector Weight rating, acknowledging the positive sales trends that aligned with their proprietary data. These developments indicate that Best Buy’s sales momentum has continued into the third quarter, with management projecting sales above consensus estimates.
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