Is Best Buy (BBY) Still a Buy?

NYSE: BBY | Best Buy Co., Inc.  News, Ratings, and Charts

BBY – Today’s featured article covers whether Best Buy (BBY) is a good buy for investors. Continue reading to find out all the details on that, and the retail sector.

Get Free Updates

Join thousands of investors who get the latest news, insights and top rated picks from!

Shares of Best Buy (BBY) surged some 10% to an intraday and new 52-week high of $83.60 after the electronics and home appliance retailer posted better-than-expected earnings and raised guidance. 

The company now expects full-year EPS of $5.81 to $5.91 vs. prior estimates of $5.60 to $5.75 prior view and $5.76 consensus. Best Buy also sees full-year enterprise comparable sales growth of +1% to +2% vs. +0.70% to +1.70% prior view.

The stock is now up 58% for the year-to-date, more than doubling the broader market as measured by the SPDR S&P 500 (SPY)

bby best buy

With a good holiday season now already priced into the shares, the question is whether Best Buy is still a good deal for investors. 

This recent earnings season highlighted the continued divergence of winners from losers in the retailing sector. 

With overall consumer spending strong, companies could not blame the economy and results were a reflection of each specific company’s business model and operational execution. 

To be blunt, there are those that have risen to the challenge of Amazon (AMZN) by developing and integrating online shopping and those that have not. 

Best Buy is clearly in the former camp. It has managed to shift from its stores simply being “showrooms” people browsed before making a purchase, from a competitor online, to leveraging the physical locations as distribution centers as offering customer support that provides services such as product education and installation. 

In this sense, Best Buy has borrowed and implemented some of the most effective strategies of other companies; its Geek Squad is similar to Apple’s (AAPL) genius bar. Through its Total Tech Support membership program, it offers is similar to Amazon’s Prime offering and offering customers the options of traditional shopping in the store, to strictly delivering to the hybrid of ordering online and picking up at the store  — taking a page from Walmart’s (WMT) and Target’s (TGT) successful omnichannel approach. 

Several analysts have noted that there is not any real game-changing blockbuster or must-have electronic device for this holiday season. In a counterintuitive way, this may actually help Best Buy as it won’t be competing with the big three, AMZN, TGT and WMT, which would use a high profile to lure people to their sites and stores. Instead, Best Buy is likely to benefit from consumers turning to them as the default choice for their electronics purchases. 

Despite the incredible run, the stock has enjoyed the shares still being cheap on various valuation metrics.  With earnings for 2020 expected to be $5.90, it trades at just 13.5x forward estimates. It also offers a solid 2.6% dividend yield. 

The stock may need to rest and consolidate after the recent surge. But, I think best Buy is a strong buy for the coming year.  

BBY shares were trading at $80.23 per share on Wednesday afternoon, down $1.34 (-1.64%). Year-to-date, BBY has gained 54.88%, versus a 27.92% rise in the benchmark S&P 500 index during the same period.

About the Author: Steve Smith

Steve has more than 30 years of investment experience with an expertise in options trading. He’s written for, Minyanville and currently for Option Sensei. Learn more about Steve’s background, along with links to his most recent articles. More...

More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
BBYGet RatingGet RatingGet Rating

Get Free Updates

Join thousands of investors who get the latest news, insights and top rated picks from!

Top Stories on

: ACB | Aurora Cannabis Inc. Common Shares News, Ratings, and Charts

Is Now the Time to Buy Shares of Aurora Cannabis (ACB)?

In March of this year, the company's stock was up nearly 90% and had a $10 billion market cap. However, currently the company’s stock sits lower by 53%.
NASDAQ: CBOE | Cboe Global Markets, Inc.  News, Ratings, and Charts

The 6 Rookie Mistakes Options Traders Should Avoid

Today's featured article covers the 6 rookie mistakes options traders should avoid. Continue reading to find all about them.
NYSE: SPY | SPDR S&P 500 News, Ratings, and Charts

[Just Released] 2020 Stock Market Outlook

What is the target for the S&P 500 (SPY) in 2020? Better yet, what are the 3 elements of stocks likely to outperform in the year ahead? Get the answers to that and more in this 2020 Stock Market Outlook.
NYSE: SPY | SPDR S&P 500 News, Ratings, and Charts

3 Things Investors Need To Know About The Blowout Jobs Report

Today's featured article covers the three things investors need to know about the blowout jobs report. Continue reading for more details
NASDAQ: GWPH | GW Pharmaceuticals Plc News, Ratings, and Charts

Why Investors Should be Bullish About GW Pharmaceuticals (GWPH)

GW Pharmaceuticals (GWPH) has been on a steady downtrend since they reported their last quarterly earnings in November.

Read More Stories

More Best Buy Co., Inc. (BBY) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All BBY News
Page generated in 1.366 seconds.