Piper Sandler downgrades Best Buy on weak appliance sales

Published 14/07/2025, 15:42
© Reuters.

Investing.com -- Piper Sandler downgraded Best Buy Co (NYSE:BBY). to Neutral from Overweight and cut its price target to $75, warning that the U.S. electronics retailer is unlikely to deliver meaningful growth in the coming quarters as appliance and TV sales continue to lag.

The brokerage said it sees no clear drivers to lift comparable sales or earnings in the near term.

Appliance sales, roughly 12% of revenue, have underperformed larger rivals such as Home Depot (NYSE:HD) and Lowe’s (NYSE:LOW) over the past five years, while Costco (NASDAQ:COST) has stepped up pressure with more aggressive service offerings.

Best Buy’s TV business, which accounts for 15% to 20% of sales, also remains under strain amid weak demand and limited product innovation.

Piper flagged a new threat from Walmart’s acquisition of Vizio, saying the deal could allow Walmart (NYSE:WMT) to undercut prices or bundle TVs with memberships, reshaping the economics of the category.

Analysts also cast doubt on whether Microsoft’s planned end-of-support for Windows 10 in October will drive a material uptick in PC sales, noting that many consumers have already upgraded or will do so at no cost.

While the firm noted some encouraging signs from Best Buy’s nascent third-party marketplace and advertising push, it said those efforts are unlikely to offset broader category declines or competitive headwinds in the short term.

The revised $75 target price implies about 11.5 times Best Buy’s projected fiscal 2027 earnings.

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.