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Best Buy shares jump on upbeat analyst takes

The Associated Press

Best Buy Co. shares jumped Monday after two analysts gave an upbeat assessment of the retailer.

Best Buy has been working to turn around its business as it faces increased competition from online retailers and discount stores.

Jefferies analyst Daniel Binder, who has a "Buy" rating on the stock, increased his price target to $52 from $40. He said that after big cost cuts and investments in service and its supply chain, he expects a dramatic improvement in the company's performance. He lifted his earnings estimates for this fiscal year and next year.

Binder also said that he believes Best Buy's recent efforts to better use space will pay off in the near future. The company announced earlier this year that it plans to reduce the amount of space in its stores dedicated to entertainment and increase space for its more popular small appliances, computing and mobile departments.

UBS analyst Michael Lasser, meanwhile, upgraded his rating on Best Buy to "Buy" from "Neutral" and raised his price target to $49 from $35. He said that company's cost-cutting plan should yield bigger savings than earlier anticipated.

Shares of Best Buy added $1.61, or 3.8 percent, to $44.02 in afternoon trading. Its stock price has more than tripled in 2013 after sliding for years. Its stock bottomed near $11 in December. It had risen to close to $49 in the spring of 2010.