Citi analysts double-upgraded Best Buy (NYSE:BBY) to Buy from Sell in a note Monday raising the price target to $100 per share from $67, highlighting what they see as a positive catalyst path from here.
The bank believes there is upside potential to both Best Buy's earnings and valuation based on tech replacement cycles underway, new AI innovation providing incremental demand, and margin execution remaining
solid.
"Last week's 1QF25 earnings print proved GM execution remains best-in-class with company-specific drivers able to offset external pressures like higher promotional activity," says Citi. "Simply put, that was a thesis changer vs. our prior negative thesis."
The bank acknowledged the second-half same-store sales risk in the face of consumer uncertainty, with factors such as the election distraction and shortened holiday calendar having an impact.
Even so, they state: "We believe BBY is in the late innings of SSS declines and is approaching the positive inflection point."
Furthermore, Citi believes it's "prudent to look at the multi-year opportunity ahead as the business returns to growth and an attractive margin expansion story develops."