Retail

What to Expect From Best Buy Earnings

BestBuy storefront OK
Source: courtesy Best Buy Co. Inc.
Best Buy Co. Inc. (NYSE: BBY) is scheduled to report its fiscal fourth-quarter results on Tuesday before the opening bell. The consensus estimates from Thomson Reuters call for $1.35 in earnings per share (EPS) on $14.35 billion in revenue. The previous year had $1.24 in EPS on $14.47 billion.

Best Buy did not post impressive numbers for the holidays, but at least they were stable after several years of weakness and turmoil that cost one chief executive and the founding chairman their jobs. Revenue for the nine weeks that ended January 3 reached $11.4 billion, up a very modest amount from $11.1 billion.

Best Buy may have found that a combination of online sales and aggressive in-store pricing has saved it from what was, in most minds, a catastrophe. This will be seen when the company reports Tuesday morning.

In the last week of February a few analyst firms weighed in on Best Buy ahead of its earnings. The results were mixed compared with Friday’s close of $38.10:

  • B. Riley reiterated a Buy rating with a price target of $47, implying an upside of 23.4%.
  • Wedbush reiterated an Underperform rating with a price target of $24, implying a downside of 37.0%.
  • RBC Capital reiterated a Buy rating with a price target of $42, implying an upside of 10.2%

The consensus analyst price target of $41.22 implies an upside of 8.2%.

Deutsche Bank analysts are optimistic for Best Buy ahead of this release. They are slightly ahead of current Wall Street estimates and point out that comparable sales for the nine-week holiday period increased 3.4% domestically and 2.5% companywide. That included the added benefit of about a 0.8% from mobile phone installment billing plans. With the discretionary money being a solid help, the stock could have a great quarter.

Shares were trading up 1.4% at $38.64 in the second half of Monday’s trading session, below the consensus analyst price target. The stock has a 52-week trading range of $23.87 to $40.03.

ALSO READ: Can Best Buy Make a Dent in the Wedding Registry Business?

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