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On Friday, a Wedbush analyst adjusted the price target for Best Buy Co. Inc. (NYSE:BBY), reducing it to $70 from the previous $75 while retaining a Neutral stance on the stock. The revision follows Best Buy’s first-quarter results, which did not meet the buy-side expectations for revenue but exceeded them on the bottom line. The positive bottom-line results were partly influenced by a favorable tax settlement. According to InvestingPro data, Best Buy’s stock currently trades at $66.32, with analysts’ targets ranging from $63 to $95, reflecting mixed sentiment about the company’s prospects. The company maintains strong fundamentals with an EBITDA of $2.59 billion over the last twelve months.
Best Buy’s updated full-year forecast reflects the impacts of tariffs, although the adjustment was less severe than anticipated after the fourth-quarter earnings. The company has been able to partially mitigate these effects with strategies involving its supplier base. Wedbush’s analysis suggests that the revised outlook is based on the assumption that consumer behavior will remain stable, with a continued interest in value but a willingness to invest in significant purchases when necessary. InvestingPro analysis indicates that Best Buy operates with a moderate level of debt and maintains strong cash flows to cover interest payments, positioning it well to navigate current market challenges. The company’s Financial Health Score stands at "FAIR," supported by solid profit and cash flow metrics.
The report highlighted that the biggest risk to Best Buy’s outlook could be a change in consumer spending habits, especially if tariffs lead to higher prices and deter spending on big-ticket items. The trade environment’s uncertainty also poses a risk, as current guidance and estimates presume that the rollback on tariffs for Chinese goods will continue throughout the year. However, there is a possibility that trade discussions could take a negative turn before reaching a resolution.
Despite the sell-off that occurred the previous day, where Best Buy shares fell by 7.3% compared to a 0.4% increase in the S&P 500, the analyst noted that Best Buy’s valuation has become more appealing. The stock is now trading at 10 times the firm’s fiscal year 2026 estimates, below the 10-year average of 13 times. Nevertheless, the lack of immediate catalysts for growth and the ongoing concerns related to tariffs in the discretionary spending sector are seen as creating an unfavorable risk-reward scenario in the near term.
In conclusion, Wedbush has recalibrated its estimates to account for the anticipated mitigation of tariff impacts. The firm remains neutral on Best Buy’s stock and has set a new price target of $70, reflecting the current market challenges and potential risks ahead.
In other recent news, Best Buy has seen several adjustments in its stock price target from various analyst firms following its recent earnings report. Goldman Sachs revised its price target for Best Buy shares from $116 to $94, maintaining a Buy rating, after the company reported a slight sales miss and reduced its fiscal year 2026 guidance. Similarly, DA Davidson lowered its price target from $95 to $90, also retaining a Buy rating, acknowledging improvements in tariff management and expectations of future policy changes. Jefferies also adjusted its price target to $88 from $92, keeping a Buy rating, and highlighted the company’s efforts to diversify its sourcing and its potential for double-digit EPS growth in the coming years.
JPMorgan reduced its price target from $110 to $95, maintaining an Overweight rating, after noting mixed financial results, including a comparable sales miss and a reduced full-year forecast. Despite the slower start to the quarter, JPMorgan finds the stock’s current valuation appealing. Truist Securities, on the other hand, increased its price target from $64 to $69 while maintaining a Hold rating, noting that positive sales in computing and tablets were offset by weaker sales in discretionary categories. Best Buy’s efforts to mitigate tariffs have been more successful than anticipated, but sales momentum remains subdued. These recent developments reflect a varied outlook among analysts, with a general consensus on Best Buy’s potential to navigate current market challenges.
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