On Friday, Best Buy Co., Inc. (NYSE:BBY) received a reaffirmed Sector Weight rating from KeyBanc, after the retailer reported second-quarter earnings that surpassed expectations. Best Buy's stock experienced a notable gain, closing up 14.1% compared to a flat performance from the S&P 500 on the same day.
The company's improved financial results come amid a challenging industry environment. Best Buy's comparable store sales decreased by 2.3% in the second quarter, which was a marked improvement from the 6.1% decline seen in the first quarter. The trend continued to show signs of recovery with nearly flat comparable sales in the third quarter to date.
Best Buy's management has updated its comparable store sales expectations for 2024, narrowing the forecast due to increased uncertainty in the second half of the year, particularly with the upcoming election. Despite this, the company has raised its full-year earnings per share (EPS) guidance, reflecting strong performance in the first half of the year.
The analyst from KeyBanc noted that while many product categories remain weak and the market competitive, there are signs of stabilization within the industry. The analyst expressed a positive outlook for Best Buy's long-term recovery potential, suggesting that the company's results may be at a low point with significant opportunities for improvement ahead.
In other recent news, Best Buy has been the focus of several analyst adjustments following robust second-quarter earnings results and raised guidance for the fiscal year. Loop Capital, Piper Sandler, Truist Securities, Telsey Advisory Group, and Jefferies all increased their price targets for Best Buy, reflecting confidence in the company's performance and strategic response to industry trends.
Loop Capital raised its price target to $110, highlighting Best Buy's significant acceleration in comparable sales and effective expense management. Meanwhile, Piper Sandler increased its target to $114, citing the company's impressive expansion in EBIT margin and better-than-expected sales. Truist Securities, on the other hand, updated their price target to $107, acknowledging Best Buy's surpassing of sales and earnings expectations.
Telsey Advisory Group increased its price target for Best Buy to $115, emphasizing the company's effective cost control and growth in higher-margin businesses. Lastly, Jefferies increased its price target to $116, acknowledging the surge in demand for consumer electronics replacements and upgrades.
InvestingPro Insights
Best Buy's (NYSE:BBY) recent performance has not gone unnoticed in the market, with the stock trading near its 52-week high. The company's market capitalization stands at a robust $21.61 billion, and the P/E ratio, a key indicator of the company's valuation, is currently at 15.15. This valuation reflects a combination of the company's past twelve months and expectations for its future profitability. Despite a slight dip in revenue growth, down 4.14% in the last twelve months as of Q2 2025, Best Buy has managed to maintain a strong gross profit margin of 22.29%.
Investors may also find the dividend yield of 3.75% particularly attractive, especially given that Best Buy has consistently raised its dividend for the past six consecutive years. This commitment to returning value to shareholders is further underscored by the company's ability to cover interest payments with its cash flows. For those interested in the company's stock performance, Best Buy has demonstrated significant returns over the last week, month, and three months, with price total returns of 13.65%, 17.38%, and 24.09%, respectively.
For a deeper dive into Best Buy's financial health and stock performance, InvestingPro offers additional insights and metrics. Currently, there are 15 more InvestingPro Tips available for Best Buy, which can be accessed for those looking to make a well-informed investment decision. Visit https://www.investing.com/pro/BBY to explore these exclusive tips and data points.
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