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Analysts Reiterate Favorably On Best Buy

Eric Niederer

Shares of Best Buy (NYSE: BBY) are up following an EPS beat on its first quarter 2014 earnings report. Additionally, the company's board announced regular quarterly dividends of $0.17 payable on July 3, 2014 to shareholders on record as of June 12, 2014.

President and CEO Hubert Joly commented, "This quarter reflects continued progress in our Renew Blue transformation. We made progress against our three business imperatives, which are to improve our operational performance; build our foundational capabilities to unlock future growth strategies; and leverage our unique assets to create a differentiated value proposition that is meaningful to our customers and our vendors."

On Friday, May 23, analysts at B. Riley, Deutsche Bank and Jefferies had Best Buy rated as a Buy. The sentiment among these firms is that an improving gross margin percentage, high performance in ecommerce and improved cost controls are the primary factors driving the stock.

Jefferies analysts expressed approval for Best Buy management saying, "We like this management and the work they're doing to make a tough business better... Arguably, it hasn't all come together quite that way yet, but we see the potential."

Deutsche Bank made note of Best Buy's deceleration in domestic comps on a two-year basis, but the firm sees this as a result of industry trends - not issues of market share. Moreover, Deutsche Bank wrote, "it appears as if Best Buy is taking market share, and online in particular, which was up 29 percent for the company."

Analysts at B. Riley believe that continued margin benefits will more than offset the "modest pressure" expected to remain on the company's near-term sales and suggest that shares will receive upward momentum from raised consensus estimates.

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