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

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In the latest trading session, Best Buy (BBY) closed at $69.91, marking a -1.77% move from the previous day. This move lagged the S&P 500's daily loss of 1.15%. Elsewhere, the Dow lost 0.52%, while the tech-heavy Nasdaq lost 0.37%.

Coming into today, shares of the consumer electronics retailer had lost 1.97% in the past month. In that same time, the Retail-Wholesale sector lost 3.17%, while the S&P 500 lost 5.08%.

Wall Street will be looking for positivity from Best Buy as it approaches its next earnings report date. On that day, Best Buy is projected to report earnings of $1.89 per share, which would represent a year-over-year decline of 36.58%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $10.85 billion, down 8.46% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.69 per share and revenue of $49.1 billion. These totals would mark changes of -13.19% and -5.14%, respectively, from last year.

Any recent changes to analyst estimates for Best Buy should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Best Buy currently has a Zacks Rank of #3 (Hold).

Digging into valuation, Best Buy currently has a Forward P/E ratio of 8.19. This represents a discount compared to its industry's average Forward P/E of 10.76.

We can also see that BBY currently has a PEG ratio of 0.97. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Consumer Electronics industry currently had an average PEG ratio of 0.78 as of yesterday's close.

The Retail - Consumer Electronics industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 182, which puts it in the bottom 28% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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