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Best Buy (BBY) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
·3 min read

Best Buy (BBY) closed the most recent trading day at $118.69, moving -1.82% from the previous trading session. This change lagged the S&P 500's 0.22% loss on the day. Meanwhile, the Dow lost 0.35%, and the Nasdaq, a tech-heavy index, lost 0.28%.

Heading into today, shares of the consumer electronics retailer had gained 12.32% over the past month, outpacing the Retail-Wholesale sector's gain of 8.23% and the S&P 500's gain of 3.82% in that time.

Wall Street will be looking for positivity from BBY as it approaches its next earnings report date. The company is expected to report EPS of $1.66, up 46.9% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $10.83 billion, up 10.93% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.12 per share and revenue of $45.31 billion, which would represent changes of +17.3% and +3.82%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for BBY. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. BBY is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, BBY currently has a Forward P/E ratio of 16.97. Its industry sports an average Forward P/E of 16.97, so we one might conclude that BBY is trading at a no noticeable deviation comparatively.

Meanwhile, BBY's PEG ratio is currently 2.2. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BBY's industry had an average PEG ratio of 1.45 as of yesterday's close.

The Retail - Consumer Electronics industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 120, putting it in the top 48% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow BBY in the coming trading sessions, be sure to utilize Zacks.com.


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Zacks Investment Research