Best Buy Co., Inc. (BBY) Buy or Sell Stock Guide

Last updated: Sep 23, '17

The analysis below may be helpful to you if you have any of the following questions about BBY stock:

  • Is BBY a buy or a sell?
  • Should I sell or hold BBY stock today?
  • Is BBY a good buy / a good investment?
  • What are BBY analyst opinions, recommendations, ratings?

Here are BBY stock buy reasons/signals:

1. Best Buy has re-engineered its online sales platform, improving the user experience and adding greater ship-from-store fulfillment capabilities.

2. New television, smartphone, gaming, health/wellness, connected home and virtual reality advances can offer product cycles that drive periodic top-line outperformance.

3. Best Buy has cut more than $1 billion from its annual cost structure and is targeting another $400 million in operating income improvement through improved returns, replacements, and damages processes and operational efficiencies.

4. BBY quarterly revenue growth was 4.80%, higher than the industry and sector average revenue growth (4.62% and 0.93%, respectively).

5. BBY profitability is improving. The YoY profit margin change was 0.85pp.

6. BBY forward dividend yield is 2.43%, higher than the industry (0.62%) and sector (0.81%) forward dividend yields.

7. BBY average analyst price target ($60.08) is above its current price ($53.90).

Here are BBY stock sell reasons/signals:

1. Online retailers, mass merchants, warehouse clubs, and consumer product OEMs all compete for market share, resulting in aggressive industry price competition and constraining Best Buy's longer-term margin expansion opportunities.

2. Entertainment sales remain sluggish. Replacement categories in Best Buy's stores are often slower-turning, lower-margin products.

3. Warranty sales have historically been a disproportionate contributor to margins. If consumers continue to gravitate to online retailers or vendor direct-sales platforms, declining warranty attachment rates will weigh on margins.

4. BBY short share of float is 19.84%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock.

5. BBY short interest (days to cover the shorts) ratio is 7.26. The stock garners more short interest than the average industry, sector or S&P 500 stock.

What are your thoughts on BBY?

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